Health Insurance Rules


 Health Insurance Rules

Insurance is one of those things that we all need and don’t want to be without. Unless you are already covered through the National Health Service, then in the UK at least, it is necessary for everyone to have some form of insurance.

But what kind? What are the rules? The UK has a very different system from America, so if you live in America, this article will not apply to you. It will however, be of interest to the UK reader.

At the most basic level, we are talking about two types of health insurance: those for illness only and those that cover accident too.

Accident only insurance is rarely available voluntarily: it is normally mandatory if you are driving a car. You can also get it on some kinds of mortgage. It usually comes with a very high excess (the amount you pay towards a claim) and limited cover (only for certain kinds of accident).

So what we are going to look at here is the type of health insurance that covers you for illness only (unless you have an extended cover policy).

The first thing to say is that you cannot get it from the NHS. The NHS will insure your medical bills and any compulsory treatment such as immunisation, but it does not insure against illness. The only exceptions are that some GPs will take a cash payment in lieu of charging for a consultation and in Scotland and Northern Ireland, prescriptions are free on health grounds. In England, however, there is no universal healthcare entitlement: if you have no other form of insurance then any treatment must be paid for by cash or credit card.

With this in mind, you can get private medical insurance without paying any income tax. You can be as low or high earners as you like, as long as your income is less than the limit for 40% tax. In 2010-11 this was £18,000 per year.

The good news is that it has never been easier to get a quote and to compare companies. The UK market is growing rapidly and there are more than 2,000 companies selling health insurance these days. This means that it’s easier to find out whether you can afford to buy a policy and what sort of policy you need (whether it's for illness alone or illness and accident). It is also possible to get quotes from overseas companies.

The main problems with private medical insurance are:

1. there are a lot of different policies on the market, so it can be difficult to choose;

2. premiums go up and down all the time, so you need to check if prices are rising or falling; and,

3. it is very "in your face" - you need to make sure that what you are getting for your premium is what you want for yourself. There's no "option packages" or range of policies, just one single policy to buy, regardless of how healthy or healthy you think you might be etc.

The main companies that sell medical insurance in England are:

1. Aviva; 2. Direct Line; 3. First Direct; 4. Norwich Union; and 5. Prudential.
You can find a complete list of all UK insurers here (updated regularly).
It is also worth checking the websites of the big insurance brokers such as Stewart & Co or CGU, which don't just sell insurance but also offer investment and financial planning services.

Health care reform in Britain has led to a trend away from 'traditional' health insurance towards private medical insurance. Many medical claims are now managed through the NHS, while policies offer more 'bespoke' cover. The Royal College of Physicians recommends that patients should switch from traditional health insurance to private insurance as a matter of "prudent policy" in order to reduce NHS expenditure.

Insurance is not taxed in the UK, but it is taxed under other headings such as capital gains tax on investment returns and stamp duty on the transfer of shares. However, health insurance that covers only one person is specifically excluded from taxation. This can be important because other forms of insurance such as car, home and travel insurance are taxed at source and the benefit is taxable.

Remember also that you may be able to claim some money back on your medical insurance premiums if you are self-employed or an employer. For example, a company called Healthcave offers a free online service to help self-employed workers reclaim tax on their private medical cover premiums online.

For a health-related topic, see: Health care in the United States.

From the University of Oxford.
This is an academic article from University of Oxford that aims to explain the intricacies of both UK and American health insurance systems. It delves into political issues, medical fine print and financial jargon so it might not be appropriate for everyone but it is a very good read with plenty of case studies from all over the world including America, Canada and Australia.

"Healthy Care at Work Limited" (HAL) is a mutual organisation that provides free third party medical cover for more than one million members through its 47 friendly offices across England, Scotland and Wales. HAL is one of the UK's largest private healthcare providers and has been in operation for over 20 years.

HAL is an insured society which means that its members have the benefit of legal protection should liability befall their organisation. The insurance policy covers various aspects of HAL including its policy, operations and employees.

Health insurance in Australia handles health services through Universal health care fees paid mostly by the government. This is a common form of health insurance where everybody gets coverage through a government system regardless of income level or medical history. The goal is to provide quality medical services to all residents of Australia at an affordable cost – particularly those who have difficulty maintaining basic standards of healthcare due to financial or medical constraints.

Private health insurance plays a complementary role and does not cover the full cost of services provided by the government-funded healthcare system. Most Australians have some form of supplementary private health insurance; many who are self-employed or have a pre-existing medical condition – which makes them ineligible for government coverage.

The private health system is paid for by a combination of the patient, government subsidies and private contributions (co premiums). Some services provided are very expensive and only available in private hospitals. For example, costs associated with organ transplants are not covered in Australia by the public system nor are cosmetic treatments such as breast enhancements and basic dental care.

The main problems with private medical insurance:


Insurance providers have a big role to play. They can encourage people to insure themselves in many ways, for example by introducing an individual 'carrot'. Providers can also actively encourage under-insured individuals to take out health insurance by offering them a choice of different insurance plans and subsidising their cover. If the provider is a large country with a modern economy, it will be able to buy all health facilities and these will be available not just for those who insure but for everyone.


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