Is it worth spending extra money to insure against day-to-day medical expenses? asks FIONA REDDAN
GIVEN THE ever-increasing cost of attending GPs and dentists, health insurance schemes aimed at helping to cover everyday medical expenses by offering cash back on each visit have their attractions. But is it actually worth spending the extra money to top up your existing plan or would you be better off just paying yourself and claiming back your tax relief?
Most of the main health insurance players in the Irish market now offer such products.
Vhi has two everyday plans: Healthsteps Gold and Healthsteps Silver, which can be bought either to top up an existing plan which primarily gives hospital-based cover, such as Plan B, or they can be bought on a standalone basis.
The schemes offer a wide range of outpatient benefits including up to €35 back per GP visit, up to €30 towards annual prescriptions and up to €75 for consultant visits.
SIMILARLY, HIBERNIAN Health offers two plans aimed at meeting day-to-day expenses: Day-to-Day A, and its premium product, Day-to-Day 50. Benefits of these schemes include up to €30 towards GP and physiotherapy fees and up to €100 a year for a health screening.
Again, these can be purchased either to top up an existing plan, or on a standalone basis, and a discount is given for those looking to top up an Hibernian plan.
Another option is provided by the Hospital Saturday Fund (HSF), which provides cash grants towards everyday medical costs, including routine GP, dental and optical visits, hospital visits, complementary medicine and personal injury.
Its 2650 scheme, for example, offers €13 back on GP visits, €840 towards consultancy visits a year, and €71 a night towards hospital stays.
Costing from €114 a year, at first glance the range of products on offer from the various insurers seem to give good coverage for those whose main insurance policy offers few reimbursements towards outpatient costs.
They also appear attractive for people who are happy with public hospital care, but who don’t qualify for a medical card and would like some assistance towards meeting the cost of visiting the GP, and so on.
But before signing on to one of these schemes, you will need to sit down and work out how frequently you will actually use the insurance cover, as you can also claim back part of such expenses by writing them off against your tax. If you’re an infrequent user of out-patient services, you might find that you would be better off just to hold onto your receipts and claim back at the end of the tax year rather than forking out for an additional insurance policy.
ALTHOUGH THE Med 1 form has become less attractive for higher earners as deductions will be allowable only at the standard rate, it still offers a 20 per cent reduction and since 2007 you no longer have to deduct an excess, which used to mean that the first €125 of your claim was disallowed.
So, take the example of an average person with no insurance who goes to a GP five times during the year (€300) and makes one visit to the dentist for a check-up (€60). As the person has enough PRSI stamps to qualify for a free dental check-up, the total cost incurred will be just €300. By claiming back through the Med 1 form, this will be reduced to €240.
If the person had purchased Vhi’s Silver option, the cost of the above expenses would be €435 (including the €135 cost of the policy and a free dental check-up). While €125 (€25 per GP visit) could be claimed back from the Vhi, the overall cost would still be €310 – which is more expensive than having no insurance.
Although this can be reduced further by claiming tax relief on the proportion of the fees which haven’t been refunded by the insurance provider (20 per cent of €175), this only brings the net cost down to €275, which is still more expensive than having no insurance policy, and also requires you to complete two claims forms – one for Vhi and one for the Revenue Commissioners.
ON THE other hand however, if you find yourself paying out very often for medical expenses, then you might do best to consider one of the aforementioned options.
For example, for a person who incurs outpatient costs of €1,640 during the year (seven GP visits at €60x7; four consultant visits (€150x4); four physiotherapy visits (€80x4) and one health screening (€300), the total amount they can claim back using the Med 1 form is €328, thus reducing their total costs to €1,312.
On a standalone basis, a person using Hibernian’s Day-to-Day 50 plan will incur total costs of €1,874, including the €234 cost of the policy. However, by availing of all the reimbursements available, as well as claiming back any outstanding expenses on your Med 1 form, you could reduce your net cost to €994 (€690 back from Hibernian and €190 from Revenue), which makes it a more attractive option, to the tune of €318.
SO, HAVING assessed your likely outpatient expenses, and having come to the conclusion that you or your family might benefit from one of the aforementioned policies, which one should you then choose?
Like all other insurance policies, careful scrutiny is needed to assess which one best suits your needs. For example, Hibernian’s Day-to-Day A plan, which is roughly the same price as Vhi’s Healthsteps Silver product, offers €30 back on visits to the GP, compared with just €25 at Vhi. However, Hibernian plan members are only allowed to claim this back three times a year, while at Vhi you can claim for up to 25 GP visits a year.
Moreover, the benefits on offer differ significantly when you look at the schemes from a family perspective. For example, the total cost for a family of four on Hibernian’s standalone Day-to-Day 50 plan is €670, but this offers up to €450 back on 15 GP visits for each member of the family during the year. Over at the HSF, its 5500 scheme costs €660 a year, and includes as many family members as you desire. However, it offers only €320 back on GP visits per family, as the number of allowable visits is capped at 10.
And, as with more mainstream insurance policies, waiting periods also often apply to the benefits on offer. For example, for maternity costs there is a waiting period of 52 weeks at Vhi, 48 weeks at Hibernian and 10 months with the HSF.