A Guide to Health Cover for the Self-Employed

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A Guide to Health Cover for the Self-Employed

How to choose the right cover

It can be a false economy to go for the cheapest cover - but at the same time, no one - particularly the cost-conscious self-employed businessman - wants to waste money on things they don´t need. Firstly, you need to decide what level of treatment you want cover for. All plans will include inpatient treatment - that is, care where you need to stay in hospital overnight or longer. They will also include day patient treatment which again, means admittance to hospital but you don´t need to stay overnight. What some cheaper policies will exclude is outpatient treatment - that given in an outpatient clinic or consulting room which does not require you to be admitted to hospital.

Others will include out-patient cover but will limit the amount you can claim for out-patient consultants´ fees and diagnostic tests. Some may also exclude or limit the amount you can claim for therapy received on an out-patient basis - this can be a sensible economy as you may be willing to pay for your own osteopathy or physiotherapy treatment.

Another factor that can influence how much you pay for cover is whether you will be happy being limited to a set number of hospitals, selected by your insurer, or do you want to go wherever you wish for your care? The second option will be more expensive. But you may find that the consultant your GP has recommended will only work out of certain hospitals. If your insurer won´t cover you for that hospital, then you will need to find another consultant.

That will, for many self-employed people, be too much of a hassle to bear. While the all bells and whistles of a fully comprehensive, no excess plan may be the gold standard, it comes at a cost. And you may not need all the attachments nor be willing to pay for them. By excluding, say, out-patient care, you could cut your costs dramatically. Then, if you need out-patient care you can go through the NHS or pay for your own private treatment. Or you could opt for a plan where you pay the first part of any claim with the insurer paying the rest. Such plans can be dramatically cheaper than traditional cover.

And what about adding elements on to your cover - or just taking out insurance for particular conditions or treatments? Let´s look at all these options in more detail.

Flexible plans

With this type of health cover, you choose a base level of cover and add or take things away. So, for example, you could choose to exclude out-patient consultations with a specialist; physiotherapy and diagnostic tests - such as blood and ultrasound tests. But then you may want to add things on. You could, for example, bolt on a cash benefit which will pay up if you are hospitalised overnight - this could be particularly useful for the self-employed. Or you could enhance some other options, such as increasing the amount that will be paid for therapy.

Self-employed businessmen and women who travel abroad can extend their policies to include overseas cover. And you could add on dental cover. As an added incentive, the self-employed may be offered a discount as they tend to claim less than employees.

Pros and Cons for the self-employed

  • You get to choose what you want to cover rather than being dictated to by an insurance company.
  • You keep your costs in check by adding on and taking away elements.
  • Opting for cash benefits which are paid when you are hospitalised could help make up for income lost from your business.
  • You need to make sure that you aren´t excluding too many things for the sake of saving money - it could be a false economy if you need to claim.

Cash plans

Much cheaper than traditional health cover, these plans help customers make most of their NHS care. NHS Top-Up plans don´t actually insure you for private care. Instead, they make cash payments (with set limits) if you are admitted to an NHS hospital or need other treatment within the NHS. They will also make payments for optical, dental and physiotherapy. Some traditional medical insurance plans include elements of top-up plans in that they may make payments if you opt for NHS treatment.

Pros and Cons for the self-employed

  • Less expensive - cover could cost just a few pounds a week depending on your age.
  • But you aren´t getting private medical treatment, just payments that you could use to fund such treatment. As private medical treatment is expensive you might soon find that your money is spent.
  • If you are happy being treated on the NHS - in some parts of the country there are no waiting lists for some treatments - then cash plans can work as they pay you money for each night you spend on an NHS ward.
  • For a small businessman who does not earn when he´s ill this can be a comfort.

Co-payment (Shared Responsibility) plans

With this type of plan you agree to pay a set percentage of any claim and as a result slice your premiums significantly. It works like this. You agree to pay up to a certain monetary limit each year - say, a limit of £1,000. Because you are sharing the costs with the health insurer, it pays a percentage of the claim - say, 75%, and you pay the remaining 25%. But if your claim is a large one and your 25% would come to more than the £1,000 you have agreed to pay, you won´t have to pay any amount on top of this - your costs will always be contained at £1,000 for that year. So, basically, when you´ve paid the excess the insurer will pick up all the bills after that.

Pros and Cons for the self-employed

  • Far cheaper premiums than traditional cover.
  • You know precisely how much the maximum you will have to pay will be and therefore cost containment is easier.
  • It fits in with the self-employed ethic of self-reliance and taking responsibility for your own needs.
  • Still offers fully comprehensive medical cover - so no limitations on which hospitals you use.
  • And you can choose whether to enhance limits on out-patient care and therapy - as well as whether you add on other benefits such as worldwide care.

View WPA´s co-payment explained

For more information

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