Cash plans pay for the extra, often hidden, costs of being in hospital. Laura Slattery reports
Admission to hospital, whether planned or unexpected, can create all kinds of costs not covered by private health insurance.
Everything from a snug new dressing gown and satisfactory reading material to bigger ticket items like travel expenses and emergency childcare may need to be paid for at a time when most people could do without the stress of worrying whether or not their bank balance can take the strain.
A VHI, Bupa or Vivas insurance policy will cover the often intimidating cost of hospital stays, serious operations and inpatient or day-patient consultants' fees.
But another type of insurance policy called a cash plan complements people's main private health insurance by giving them a modest sum for each night or day they spend in hospital.
The cash benefit, which ranges from €25 to €120 per night depending on the level of premium selected, can be spent on anything. The cost of treatment itself though will still need to be covered by a VHI, Bupa or Vivas hospital plan.
Around two million people in the Republic are members of private health insurance plans, but the figures for cash plans are much lower: it is estimated that around 190,000 people here own cash plans sold by HSF (the trading name of the Hospital Saturday Fund) or HSA Ireland (formerly known as the Hospital Saving Association).
As well as giving a benefit for hospital admissions, cash plans come into their own around the birth of a baby.
On HSF and HSA's individual schemes, maternity grants of up to €800 are payable on the birth or adoption of a child, as long as the customer has planned ahead and served a waiting period of at least 10 months.
If the father is also a contributor, HSF will pay out the grant twice, meaning a couple who are both members of its plans can obtain total birth and adoption grants of up to €1,600. HSA will give the grant to fathers, but will pay out only once in respect of each child.
Should complications arise, new mothers who have an extended stay in hospital will also be paid the standard hospital benefit from the sixth night onwards in the case of HSF and from the 15th night onwards on the HSA plans.
Cash plans are, therefore, a good idea for anyone planning to start a family.
For example, HSA's most expensive plan has a weekly premium of €9 and pays out €500 on the birth or adoption of a child to the member or their partner.
The annual cost of this plan is €468, meaning customers who claim the grant can instantly recoup their premiums for the first year, while also receiving cover for a range of other outpatient expenses.
The HSA's cash plans start at €117 annually for one person and up to four children and €234 for two adults and up to three children.
The cost of the HSF One Scheme, which covers the contributor only, starts at €156 annually, with the highest level of benefits available for an annual cost of €624.
Its family schemes (which cover two adults and all dependent children) cost from €114 to €660 a year.
Most people with cash plans are members of group schemes and have signed up to them as part of their package of benefits at work.
Dick McGlew, who works for Tara Mines, is part of both a HSF group scheme and a VHI group scheme through his employer.
He pays a premium of €7.50 a week, or €390 a year. Among the benefits he receives are 50 per cent cover for dental and optical treatment for him and his family, up to an annual limit of €360. He can also get a grant of €19 for up to 10 visits to a GP or A&E department in any one year and a grant of €10 towards a maximum of four prescriptions.
"My wife and I and the children have all got glasses, then there's GP bills - it all adds up. My wife had a bad back for a while, and the cash plan paid money towards the osteopath," says McGlew, who has eight children, two of whom are still under 18 and are covered by the plan.
McGlew says the company was actually looking for a serious illness policy for its staff but ended up choosing the cash plan.
"A lot of serious illness cover tends to be very specific. You almost have to have broken your left leg playing football on a Sunday morning, before 10am, to get money out of it. The cash plan gives broader cover," he says.
In addition to the benefits shown above, HSF pays out weekly sums of up to €70 for temporary disabilities following an accident if the person is unable to work.
The benefit starts after a month and continues for a year.
Lump sums are also payable in the event of a permanent disability.
The cash plans work on the general rule that the more you contribute, the more you will get back in benefits if you need to make a claim.
However, HSF, which has 120,000-130,000 members in the Republic, and HSA, which has up to 60,000 members, operate their schemes in different ways.
In both cases, there will usually be a shortfall for certain expenses.
For example, the HSF's most expensive One Scheme, which has a weekly cost of €12, will pay a maximum of €25 per GP visit, subject to a limit of 12 claims for GP visits, trips to the emergency department and prescriptions in any one year. HSA's individual plans cover 50 per cent of the cost of GP visits subject to an annual limit of €40-€160.
HSF and HSA are facing increasing competition from the main insurers. Cover for day-to-day expenses can now be purchased as part of Bupa's Health Manager plans and VHI's Life Stages plans or as an add-on to the Vivas plans. VHI also offers a standalone everyday healthcare product called Health Steps.
Health Steps Gold, which costs an adult €169 a year, gives back €30 for every GP visit, up to a generous limit of 25 visits per annum. It also allows unlimited visits to the dentist, but pays only a maximum of €25 per visit. A cheaper version, Health Steps Silver, costs €109 a year, and pays €20 for GP visits and €15 for each dental visit.
The new products mean there is an increasing array of policies and plans available to people seeking compensation for GP visits, dental and optical visits and other kinds of healthcare expenses routinely incurred by parents with young children.
But there is another way to get money back without having to fork out for yet another insurance policy.
Consumers can claim tax relief on the portion of their medical expenses that hasn't been reimbursed under any health insurance or cash plan.
The relief, which can be claimed by filling out the Revenue form MED 1, is available at the highest rate of tax the person pays.
Sadly, the first €125 of medical expenses incurred in any one year - or €250 in the case of a family - is not eligible for relief.