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Health Insurance Excess – What You Need To Know

Health insurance excess is something that most would consider including on their prospective health insurance policies. However, it’s not uncommon for those seeking private medical insurance not to understand what excesses are and how
they work clearly.

This guide aims to provide all the necessary information on health insurance excess.

What is a Health Insurance Excess?

When considering purchasing a private health insurance policy, the term ‘excess’ may crop up when reviewing the different plans available to a prospective policyholder. So what does the word mean in health insurance?

A health insurance excess is the amount you will have to pay towards any treatments when you claim your policy. That means you will spend part of the cost of the private treatment, and the insurer will pay the
rest.

We can elaborate on the definition with an example.

If you required a treatment that cost £2500 and you agreed to an excess of £500, then the insurer will pay £2000 for the treatment while you cover the remaining £500 from your pocket.

Excesses offered in private health insurance plans can vary from different providers, but it’s typical to see increments of £0, £100, £200, £500, £1000, £3000, or £5000.

Many would ask why they would agree to these excesses on their health insurance when comprehensive policies would cover all necessary treatments in total. There are reasons behind offered surpluses in policies.

Why Would I Want to Pay the Excess?

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The prospect of having to pay part of treatment in the future is understandably unnerving. However, there are benefits to agreeing to excesses for your health insurance policy.

The core is that the more excess you agree on your plan, the lower the cost of monthly premiums. Those who don’t have a history of medical ailments and aren’t prone to injury or illness may choose a higher excess.

That means premiums will be low, whereas, in private medical treatment, they will contribute towards the coverage themselves to save on monthly costs.

However, it is essential to note that not all private medical insurance operates in the same fashion regarding excesses. We recommend discussing how excesses function with your preferred plan.

So with the definition and benefits of health insurance excess in mind, how does it work?

How Does Health Insurance Excess Work?

Suppose you have agreed to excess on your private medical insurance and require treatment. In that case, you may wonder how the process works in raising a claim with your provider. Explore the steps below to how health insurance excess
works.

1. Get in contact with your health insurance provider.

Suppose you have visited a medical specialist and agreed you require treatment. In that case, they will give you a note or prescription recommending what needs to happen. Should you wish for therapy in a private facility, get in touch
with your health insurance provider to discuss requirements.

Sometimes, hospitals or facilities will contact the insurer to understand the terms and excesses of your health insurance plan. Other times, you will need to seek authorization directly for treatment. Also, note that some providers
require paying your excesses to the private medical facility upfront.

Once the insurer has authorized the treatment, you can visit the facility discuss it with your provider.

2. Proceed to receive the necessary treatment at a private medical facility.

Bring any authorization documentation and insurance details with you on your hospital or medical care center visit. Provide any administrators at the facility with the necessary information. Then proceed to get your treatment with the
specialist of your choice.

3. Process the bill with your insurer.

Once treatment is complete, you’ll receive the bill for all the costs relating to the visit. That includes consultation, treatment, et al. The invoice will include a thorough breakdown of all services rendered for your treatment. Hence,
all parties get a clear and concise understanding of the total cost of the procedure.

The primary purpose of the invoice is to identify what your insurance covers and what you will have to pay in line with the terms of your private health insurance policy. At this point, you’ll want to review your bill for any anomalies
and then contact your insurer about processing their agreed expenses.

4. Pay the agreed excesses to the medical care facility.

If you haven’t paid the excesses upfront, pay the out-of-pocket costs agreed from the invoice. Note that if the total amount of the bill is less or the same as your agreed excess, you will cover the cost of the treatment. Anything more
than that, the insurer will pay.

5. Your insurer will cover the remaining costs.

The insurer will pay the remaining treatment costs outside of your agreed excess. Remember, communicating with your provider about your condition will help make the claims process seamless.

There could be an occasion where there’s a need for repeated treatment that rises above your excess limit, meaning it’s up to the insurer to cover the costs of treatment. Again, discuss any future scenario with your provider to
understand coverage further.

How Much is a Private Health Insurance Policy Excess?

Agreeing to pay an excess on your private health insurance claims will always result in monthly premiums. The impact of the excess costs depends on how much you are willing to pay upfront should you require treatment.

As aforementioned earlier in this article, you’ll likely receive offers to pay £100, £200, £500, £1000, £3000, or £5000 as excesses on treatments. The higher amounts mean that your monthly premiums could end up very low. Again, terms of
excesses vary by insurer and should get discussed when choosing a plan.

However, you may ask how often you’d need to pay the excess on top of your premiums.

How Often is an Excess Paid?

Generally, you will only need to pay an excess when you make a claim. However, some insurers have more complex terms, some beneficial, some not.

Many insurers will offer a cap on excesses, meaning any costs of treatment exceeding that agreed amount will get covered by the provider. Others will include the agreed excess on every claim, which could add up while it may have cheaper
premiums.

Is a Health Insurance Excess Right for Me?

So with all that information in mind, is a policy with excesses right for you? If you agree to excesses, it’s essential to consider how much you’ll be able to pay upfront realistically.

Comprehensive health insurance may have higher premiums, but at least you’ll have peace of mind of complete coverage for acute conditions and treatments.

However, if you are in a position to cover costs of treatment upfront in private facilities, putting an excess into what you can realistically afford will drive down those premiums.

A Summary of Health Insurance Excess

Let’s recap this guide on what you need to know about health insurance excess.

  • Health insurance excess is the amount you’ll pay upfront for any private medical insurance claims

  • The insurer will cover the rest of the costs

  • Higher excesses on health insurance policies mean lower monthly premiums on plans

  • Should you require treatment, facilities will break down the charges you need to cover and what your insurer will pay

  • Policy excesses can range from small amounts to the thousands

  • Pay what you can realistically afford upfront for policy excesses

Should you require more information about health insurance excess on your current prospective policy, get in touch with a broker or provider to understand more.

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