Medical Insurance - Sorry, you're not covered!

In Britain, around 7 million people spend around £ 3 billion a year on health insurance. One out of seven policies are taken out by individuals with balance being introduced by their employers. The problem is that Medical Insurance is complex and few policyholders take the time to really study the details of their coverage. As a result, many misunderstand what will be covered. If you expect health insurance to pay for any health, you're wrong.

Medical Insurance is designed to provide protection for curable, short-term health problems and allow policyholders to jump the NHS queues to see consultants, be diagnosed, receive surgery or treatment. That sounds fine, but before you buy you have to appreciate the treatments and situations that fall outside the coverage.

But first a warning. This article relates to no specific policy and the terms and conditions issued by individual insurers can vary. So please ensure you also check your policy documents. After reading this article, you must know what to look out for!

Sorry - it is a chronic condition

If a condition is curable and is not a long term problem, will your insurance company describing it as acute and should meet the cost. If your problem is incurable or it's a problem that, despite appropriate treatment will be with you for a long time, so your insurance company will classify it as chronic - and no, you will not be covered.

But deciding whether a condition is acute or chronic, is filled with problems. There is rarely a black and white decision, and this may lead to a larger area of conflict between the insured and the insurer.

It is clear that asthma and diabetes are chronic diseases that you are almost sure to suffer from them for the rest of your life. So these categories of illness are not covered.

Problems arise when doctors initially consider a patient's disease to be cured, but the condition later deteriorates and the medical team to change its' mind, it is now incurable. This can sometimes occur, especially in the treatment of certain cancers.

Under these circumstances, the condition is initially defined as acute and therefore is insured, but deteriorates and becomes chronic - and outside the scope of coverage. This is possible as insurers retain the right to reclassify a condition from acute to chronic during treatment.

Sorry - it's too long

The insurer will not pay for long-term treatment. But you need to check your policy documents to see how they define "long term". You can find the situation where a course of drugs extends say 12 months, but the insurer will only pay for ten months.

Sorry - it is preventive

Your insurance is designed to pay for treatment and cure of conditions when they occur. It is not designed to pay for treatments used to prevent a disease.

Again, the problem of definition arises. Sometimes it's questionable whether a treatment is preventative or a cure. Taking drugs such as Herceptin. This substance can be used in the early stages of breast cancer. Research shows that Herceptin can halve the incidence of cancer back in women who have a particularly virulent form of cancer known as HER2. In this situation, Herceptin offers a cure or is it a deterrent?

Insurers are split on the debate. Norwich Union, WPA, BUPA and Standard Life Healthcare will pay for Herceptin for HER2 patients whereas Legal and General and Axa PPP will not.

Sorry - the drug is not approved

Two of the biggest attractions for the health-care insurance are: to jump queues on the NHS, and to get the latest treatments and medications. But there is a rider.

Institute for Health and Clinical Excellence exists to approve the use of new drugs by the NHS in England and Wales. Until that body has approved the substance your insurance company is unlikely to pay for its use. The problem is that the Foundation's brief is to conduct a cost / benefit analysis to ensure that the economic benefits to the nation from using the drug, outweigh the costs of using the NHS. A difficult task, and it has put the Department under control for the extended delays in drug approval.

The compromise hit on the Financial Ombudsman is that if your doctor policy will pay for the use of experimental treatments, is it intended to cover the cost of an approved conventional treatment with the policyholder footing the bill for the balance if the experimental treatment is more expensive.

Sorry - it is a pre-existing condition

The basic principle is that if you already have a condition when you start a policy, then that condition "pre-exists" the policy and any requirements for treatment are invalid.

For this reason, insurance companies insist you are finished with an extensive questionnaire before they agree to insure you. After all they need a clear picture of your health condition before they quote. For many applications, will the insurer, with your approval, also write your own doctor for specific information about your medical history. They want a complete picture.

So let us say a few years ago, you twisted your knee playing tennis. It appeared to recover but now it appears that you have a torn cruciate ligament and will be operated on. Your medical insurance company could argue that the ligament injury was a pre-existing condition and you have to pay for the operation.

Some insurance companies try to meet these gray areas with a moratorium provision in your policy. These provisions typically say that as long as you have been symptom free for two years for any condition you may have had in the last 5 years, they will pay for subsequent treatment. Not all policies have these moratorium provisions and the time periods do vary between insurers. You should carefully read your policy.

Sorry - it is not covered

Medical Insurance is an annual contract - just like your car insurance. So when it comes to renewal, your insurer is at liberty to review not only your premium but also change the conditions that your coverage is provided.

Therefore, if your policy comes up for renewal halfway through a course of treatment, it is possible to discover that your new policy no longer covers that particular treatment. This means you will have to foot the bill for the remainder of treatment.

Furthermore, with ongoing advances in medical research, more and more conditions are treated. These advances have the effect of shifting back the dividing line between chronic and acute conditions.

This limits insurers' pocket in two ways. With more conditions being reclassified as acute, that the number of applications is increasing. And there is also a tendency for new treatments to cost more - Herceptin is a good example. The net result is that insurance companies are finding themselves having to pay much more. This inevitably leads back to you through increased renewal premiums. And in an attempt to reduce their risk exposure, insurers have a tendency to adjust their definitions and exceptions. This means that you must read your renewal notice closely before you decide to renew.

So if you're tempted to buy health insurance, be aware that everything is not always black and white. If you have insurance and need care, you are advised to contact your insurance company as soon as possible and get them to confirm that they would cover the cost of your proposed treatment.