When you have a Private Medical Insurance plan in place and you are considering your renewal options or if you are looking at investing in Private Medical Insurance for the first time. Shortfall and Excess insurance could be instrumental in keeping your premium costs at an affordable level.
What is an Excess?
The excess on your insurance policy is the amount you have agreed to pay in the event of a claim. Most Health Insurance providers apply the excess on a per policy year basis however on occasion you may find your policy carries a per claim excess. The higher the excess level you choose, the higher the level of discount your insurance company will apply to your premium.
What is a Shortfall?
A shortfall is the difference between the total amount that your insurance provider is prepared to pay for your treatment and the fees the consultants and hospitals charge. All insurance providers publish their own fee schedules which confirm the maximum they will pay for any treatment. *If your consultant or hospital charges outside of the fee guidelines this would result in a shortfall. It is your responsibility to settle the shortfall payment.
*when you pre-authorise your treatment with your insurer they should advise you at this time if there is likely to be a shortfall applicable to your claim. You could at this time choose to see a fee assured consultant/ hospital to avoid the issue of shortfalls occurring.
How does it work?
The Excess and Shortfall insurance policy must have the same inception date as your Private Medical Insurance policy and cannot be put in place mid-term.
When you make an eligible claim on your Private Medical Insurance, they will write to you to confirm there is a shortfall in payment against your policy and whether this is due to the applicable excess or the shortfall relating to fees. It is at this point you can claim on your Excess and Shortfall Insurance policy. You can choose to either pay the consultant/ hospital facility yourself and have the amount reimbursed directly to you or you can request the payment is made directly to the consultant/facility.
There are different levels of plan available with a maximum excess/ shortfall of £500 per policy year. You would see a significant saving in applying a £500 excess on your Private Medical Insurance policy and the cost of the Excess and Shortfall Insurance at this level would be low.
Please remember that if your excess is paid per claim that this secondary policy would only pay to one annual maximum.
i.e. if you have a £100 excess per claim and you took an Excess and Shortfall insurance policy with an annual limit of £500 then it would pay for the excess relating to 5 claims per person per policy year however if you had an excess of £500 per claim, the policy would only pay out once.