What are health cash plans and are they worth it?

Health care cash plans are schemes where you pay a monthly fee which entitles you to have your routine medical and dental expenses covered (up to a limit).  For example, you might pay £10 a month on a plan that covers up to £200 of dental costs, £100 of physio and £100 of optical.  

Health insurance is not the same thing as a health care cash plan, and you can even have both at the same time. Health insurance usually covers you for treatment of conditions that develop after you take out the plan, whereas you can use a cash plan to pay for ongoing and routine treatments. 

Another difference to standard health insurance, where you might go to private hospitals or dentists, is that you can use it alongside the NHS. Depending on which part of the UK you live in, NHS users are still expected to pay for prescriptions, eye tests and dental treatment. You can use a health care cash plan to fund these sort of routine expenses.

If you’re someone who’s going to get more out of a health care cash plan than you pay into it, it could be worth it. However, if you don’t get ill or require expensive dental treatment that year, then your monthly payments could add up to significantly more than you’ve claimed back. 

For most people, the NHS should be affordable enough. If you’re struggling to pay for prescription charges or dental appointments, for example, you could be eligible for an exemption certificate.

If you do think that a health care cash back plan is a good idea, make sure you choose one that has the relevant benefits for you. Some plans will even offer coverage for acupuncture or homoeopathic treatments like massages or aromatherapy too.

Plans can cover a range of benefits, but if you aren’t going to use one, it can be worth finding a cheaper plan that doesn’t offer it.

If you don’t think you’ll require the level of coverage a health care cash plan offers, you can still future-proof for health costs by adding the money you would spend into a savings account. 

Even if you’re relatively healthy it could still be worth adding a small amount each month into a health emergency account, so if the worst happens you’ll avoid going into your overdraft to pay for a filling. 

For most, using the NHS should be adequate. There are many reasons to get free prescriptions and dental checkups in England, including certain medical conditions, pregnancy, being in receipt of certain benefits, being over 65 or being on a low income. 

If you are struggling to afford NHS charges you can ask at the pharmacy, opticians or dentist for the form to fill out to apply for an HC2 certificate. An HC2 certificate would entitle you to:

• free NHS prescriptions
• free NHS dental treatment
• free NHS sight tests
• help with the cost of glasses or contact lenses
• help with the cost of travelling to receive NHS treatment
• free NHS wigs and fabric supports

If you don’t qualify for full or partial help with NHS health costs, but you are spending more than £10 a month on prescriptions, a NHS Prescription Prepayment Certificate could be a cheaper option for you. 

A single prescription is £8.80, but you can get an unlimited number of prescriptions for:

• £29.90 for 3 months
• £104 for 12 months (or 10 Direct Debit instalments of £10.40).

You can find out more and buy an NHS Prescription Prepayment Certificate (Opens in a new window)

The best value plan, technically, is the one that has the lowest monthly payment, for the highest amount of coverage, however, the best health care cash plan is the one that works for you. 

Weigh up how much you spend on healthcare costs in an average year against the maximum annual payouts and monthly payments to find your ideal plan. Try to get quotes from a few different companies to get an idea of the sort of prices and coverage available. 

To claim back money on medical expenses, you need to remember to keep hold of any relevant paperwork and send it to the company you hold your health care cash plan with. How much you’ll get back will depend on the terms and conditions of your plan. 

Some plans will cover 100% of expenses up to a limit, and 50% of everything after that, for example. If you don’t use your allowance within the 12 months of your policy, the remaining money in your annual limit will disappear, unused. 

It could be a good idea to check what money is remaining when there are a few months left on your policy, and book some appointments to make the most of the health care cash plan while you have it.  

Health care cash plans are a common workplace perk, so check you aren’t already covered when you sign up for a new one. 

If you have a health care cash plan as a benefit from your work, you will pay tax on the cost of the premiums if you earn over the personal allowance. If you take out your own health care cash plan you shouldn’t have to pay any extra tax on it.