What Is a Health Exchange?

What Is a Health Exchange? - Learn How Health Exchanges in Your State May Affect You

A health exchange will be created in each state by 2014. The health reform legislation (Patient Protection and Affordable Care Act) signed into law in March 2010 by President Obama creates state-based health insurance exchanges. States can choose to operate their own exchanges or participate in a multi-state exchange.

The purpose of the health insurance exchanges is to make health insurance more affordable and easier to purchase for small business and individuals.

Creation of Health Insurance Exchanges

Beginning on January 1, 2014 health insurance exchanges will be created where an individual or small business can compare the costs of various health plans and different types of health coverage benefits. If your state decides not to operate its own health insurance exchange, you will be able to purchase a health plan from a multi-state, or regional exchange run by a government agency (such as the federal Department of Health and Human Services) or a non-profit organization.

Only U.S. citizens and legal immigrants who are not imprisoned will be eligible to purchase a health plan in one of the exchanges.

Starting in 2014, you will be able to use your state's health exchange.zorani/iStockphoto

According to the health reform bill, small businesses with up to 100 employees can purchase health coverage for their employees in an exchange. Beginning in 2017, the states may allow businesses with more than 100 employees to purchase coverage in the exchange.

Starting in 2011 and continuing through 2014, your state can receive financial assistance to help pay for the cost of creating the exchange.

Multi-State Health Plans

Each health insurance exchange must offer at least two health plans that are available in two or more states. At least one of these health plans must be a non-profit organization and each plan must be licensed in each state. Enrollment in one of these plans would give you access to healthcare services in different states and, hopefully foster competition to lower premiums.

For example, if you live in New Jersey and enrolled in a multi-state plan that included New Jersey, New York, and Connecticut, your children could see a local pediatrician in your neighborhood and you could get care from a primary care physician in downtown Manhattan, near your office.

Consumer Operated and Oriented Plan

The health reform bill will provide loans and grants to create non-profit, member-run health insurance companies known as Consumer Operated and Oriented Plans (CO-OPs). To be eligible to receive federal funds, an organization wanting to set up a CO-OP must meet the following requirements:

• not be an existing health insurer or sponsored by a state or local government
• its activities must only consist of the providing and managing health benefit plans in each state in which it is licensed
• control of the organization must be subject to a majority vote of its members
• must operate with a strong consumer focus
• all profits must be used to lower premiums, improve benefits, or improve the quality of health care delivered to its members

One-Stop Shopping and Information Resource

A significant benefit of the health insurance exchanges is to make it easy for you to purchase and enroll in a health plan or provide health coverage for your employees. Some of the ways the exchanges will promote choice and competition include:

• Health plan options in your zip code will be listed on a website maintained by your state. On this site you can learn about health plan benefits and costs, and then enroll.
• If you have limited access to the Internet, your state will provide resources for you to get information and enrollment materials through the mail and at publically-designated places in your community.
• To allow for easy comparison of plans, the exchanges must use a standard form, definitions, and marketing materials. You will be able to enroll online, in person, by mail or by phone.
• A call center to assure good customer service

To make this work smoothly, the health reform law recommends that your state contract with “navigators” to provide information about the available health plans and to assist you with enrollment. This concept is based on the experience of Massachusetts – a state that implemented health reform (wich includes mandatory health coverage) in 2006. Massachusetts created the Health Connector, an independent state agency that helps citizens of the state find the right health insurance plan.

Health Plan Benefits

If you purchase insurance through an exchange, you will be able to choose health coverage that is best for you and your family. Each of the health plans to be offered will include an essential set of benefits that provide comprehensive health care services with different levels of cost sharing.

Also, your annual out-of-pocket expenses (deductibles, copayments, and coinsurance) are limited to an amount equal to the Health Savings Account (HSA) current law limit. For example, if you enrolled in a health exchange plan in 2010 (remember, the exchanges will not be available until 2014) your out-of-pocket expenses could not be more than $5,950 for an individual or $11,900 for a family).

The benefit categories will include:

• Bronze Plan: provides essential health benefits and pays for 60% of the costs of the plan with the HSA out-of-pocket limits
• Silver Plan: provides essential health benefits and pays for 70% of the costs of the plan with the HSA out-of-pocket limits
• Gold Plan: provides the essential health benefits and pays for 80% of the costs of the plan with the HSA out-of-pocket limits
• Platinum Plan: provides the essential health benefits and pays for 90% of the costs of the plan with the HSA out-of-pocket limits
• Catastrophic Plan: available to those up to age 30 or to those who are exempt from the mandate to purchase coverage

If you cannot afford to purchase a plan in an exchange, you may be eligible for a subsidy from the government based on your income and family size. If your yearly income is higher than 133% of the federal poverty level but less than 400% of the poverty level (about $43,000 for an individual), you will get a tax credit to help you pay your health plan’s premiums and out-of-pocket expenses. ( about.com )

READ MORE - What Is a Health Exchange?

Ten tips for getting your health insurance claims paid

Ten tips for getting your health insurance claims paid - Medical claims specialist Becky Stephenson remembers a client who became seriously ill, went to the emergency room and was admitted to the hospital. Fortunately, he had health insurance and a card in his wallet to prove it.

But weeks later, as he recovered at home, the bad news arrived. The insurance company had denied all claims for his treatment and his stay at the hospital. Worst of all, he owed thousands of dollars.

The problem? The insurance card was for a plan that was no longer in effect. And he hadn't replaced it with his new card.

Medical insurance claim mistakes can happen for reasons beyond your control--data entry errors, diagnostic coding changes and miscommunications between providers and insurance companies. Of the millions of health claims that are processed each year, 19.3 percent contain some type of error, according to the American Medical Association's annual Health Insurer Report Card.

Still, there are things you can do from the beginning to the end of medical care that will help speed the claims process.

1. Carry your newest health insurance card

When your health insurance plan sends a new card, put it in your wallet and throw out the old card right away, says Stephenson, president and CEO of VersaClaim Inc., a claims assistance business in Austin, Texas, and co-president of the Alliance of Claims Assistance Professionals. If you fail to carry a valid card, you do so at your own risk.

"If you get a new insurance card, it's not because the health plan thinks you need a pretty new card," she says. "It means something has changed."

When the wrong insurance information is entered into a provider's computer system, the incorrect information is transferred each time you're referred for tests or other treatment.

Stephenson's client sought help when he received letters threatening to send the accounts to bill collectors. It didn't take Stephenson long to figure out the cause of the claim denials. But she says it took "hours and hours" to straighten out the mess with the hospital's computer system.

2. Know which health insurance plan is billed first

If you have more than one health plan, know which is primary and which is secondary. Pat Palmer, founder of the trade group Medical Billing Advocates of America, has seen many claims denied simply because the secondary insurance was billed first. Make sure your provider knows which is which.

3. Answer questions from your insurance company

Your insurer may send you a letter asking whether you have other insurance or if an injury was due to a car accident. Don't blow off the inquiry. Failing to complete forms can lead to claim denials, says Katalin Goencz, who runs MedicalBillsAssist in Stamford, Conn., and is co-president of the Alliance of Claims Assistance Professionals.

4. Read your health insurance plan

A lot of companies put a summary of their plans online. But Stephenson advises you to read the fine print to understand all the rules.

"I want to see it in black and white," she says.

5. Use in-network providers

You pay less out of pocket to see providers in your health plan network than those outside the network.

"When calling the office to make an appointment, the magic question to ask is: Are you in-network with my insurance company?" Goencz says. "Most people ask, 'Do you take my insurance?'"

The difference is subtle, but significant. Some providers may accept your insurance but not be in the plan's network.

Before going to the hospital for a scheduled procedure, make sure the facility and everyone who will be involved in your treatment, from the anesthesiologist to the surgeon, is in your medical insurance network, says Palmer, who helps dispute medical bills and claim denials through her Roanoke, Va.-based Medical Recovery Services Inc.

6. Going out of network? Find out how much you'll pay

Call the insurance company and ask what your out-of-pocket expense will be for the services you want performed by that provider, Goencz says. It's easier to negotiate beforehand than after a service has been provided.

7. Double-check whether prior authorization is required

Check whether your insurer requires prior authorization before you undergo any type of procedure. If so, make sure the authorization is completed before you have the procedure done.

"It's 10 minutes out of your life that can save you thousands," Stephenson says.

8. Take good notes

Take notes of conversations you have with insurers and providers, Goencz says. Include the summary of what was said, the date and time of call, and name of the person with whom you spoke.

"I often ask for our phone call to be recorded," she says.

9. Never assume a service is covered by your health insurance

"Just because you go through a well-woman checkup doesn't mean the insurance company is going to pay for every test you have during that visit," Stephenson says.

Federal health care reform rules require new health insurance plans to fully cover many preventive services. Ask your insurer which services qualify for full coverage and under what conditions.

10. Health insurance claim denied? File an appeal

A variety of mishaps and misunderstandings can lead to claim denials.

"Some medical codes are updated yearly, some more often," Goencz says. "If a physician's billing office didn't update the code, it will be denied by the insurance company."

Missing information in a claim, data-entry mistakes and computer errors also can lead to denials from health insurance plans.

"On the insurance side you need to understand the process--most claims are submitted electronically and never touch a human eye. It runs through the electronic system and whatever comes out is the outcome," Goencz says. "Most people don't know how to appeal, and even when they try they will often end up confused and give up. If that service is covered by the policy they should not give up."

Call the insurance company and ask how to appeal, where to send an appeal letter and what information the letter should contain, Goencz says. Keep in mind many insurers routinely deny the first appeal. Typically, a deeper review occurs on the second level of appeal, she says. Find out why the first appeal was denied and provide documentation that supports your case.

"If the first appeal fails, don't send the same information and expect a different result," Stephenson says.

Given the millions of claims filed each year, it's not surprising that mistakes are made. Paying attention to details and standing up for yourself can help you get the money to which you're entitled. ( insure.com )

READ MORE - Ten tips for getting your health insurance claims paid

Seven costly health insurance mistakes

Seven costly health insurance mistakes - Before you pick a policy, carefully evaluate what you need as well as how much risk you can afford to take. Also, keep your eyes open for potentially nasty surprises.

Poring over the fine print of health insurance plans to choose a policy is nobody's idea of fun, but you're better off spending some painstaking time researching before you buy than nursing a nasty financial headache later.

The "quality" of a health plan often depends on your needs and how much financial risk you can bear.

"One size doesn't fit all," says Martin Rosen, co-founder and executive vice president of Health Advocate, which helps employers and individual clients navigate the health care system. "You really need to assess what you need."

Whether you're choosing among group health plans offered by your employer or shopping for individual health insurance coverage, there are seven scenarios to avoid.

1. Your doctor isn't in the network

You'll pay more to use health care providers who aren't in your health plan's network, so check to see if the doctors and other professionals you want are included.

A plan that tightly restricts you to a local network might be sufficient if you need care only in your area, but it won't benefit a kid away at college or meet all your needs if you spend a lot of time on the road, says Pete Villemain, the president of Employee Benefit Services, which manages employer benefits plans.

Make sure any specialists you need are also covered by the plan, Rosen says. Don't assume a specialist is in the network just because your primary care doctor gave you the name.


2. You pay huge insurance premiums to save a few bucks on the co-pay

"The mistake I see individuals make so many times is they focus so much on getting a low co-pay and they fail to look at how much extra premium they pay for it," says Villemain.

He suggests evaluating how you'll use your plan and comparing the costs accordingly. If you go to the doctor only a couple of times a year, is it worth hundreds of dollars extra on the premium just to get a lower co-pay?


3. The drugs you take aren't covered

Some states require individual plans to offer prescription drug coverage, but in other states, many individual health insurance plans don't cover drugs, says benefits consultant Michael Goodheim of Farsighted Strategies in Seattle.

If the plan provides prescription-drug coverage, check to see if your medications are included on its formulary, which lists the preferred drugs for coverage, Goodheim says. Expect to pay more if you take a drug that is not listed.

Rosen suggests checking whether the plan provides discounts if you mail-order prescription drugs in bulk. For instance, you might be able to pay less per month for a 90-day supply through mail order than for three 30-day supplies at the pharmacy counter.


4. You're overinsured

In addition to comprehensive health plans, many employers offer supplemental insurance policies, such as cancer or critical illness insurance, that pay a lump sum of cash after diagnosis. Such policies can provide valuable protection, but they might be unnecessary if you already have broad coverage under your medical insurance and short-term and long-term disability insurance, Goodheim says.
If you're footing at least a portion of the premium bill, why pay for coverage you don't need?


5. You can't afford your share of the medical bills

Low premiums are an attractive feature of high-deductible health plans, but make sure you're prepared to pay all the out-of-pocket medical expenses, Goodheim says.

Besides the deductible, check the maximum out-of-pocket expenses you pay. After you pay the deductible, many plans pay only a portion, such as 70%, of covered medical expenses. Your 30% share is called co-insurance, which you must fork over until you reach the cap on out-of-pocket expenses.

"Those dollars can really add up," Goodheim says.


6. You're expecting, but your policy doesn't cover maternity care

Most employer-sponsored plans cover maternity and prenatal care, thanks to the federal Pregnancy Discrimination Act of 1978 and the Health Insurance Portability and Accountability Act of 1996, as well as many state health insurance mandates for group coverage. Some states also require individual health insurance plans to include maternity coverage, but in states where there is no such mandate, many individual health plans pay only a small portion of the costs or don't cover maternity at all. Even if the plan includes maternity coverage, read the fine print to know exactly what is covered and whether there's a monetary cap.

Starting in 2014, individual and small-group plans sold through state health insurance exchanges must include pregnancy and newborn care, along with other essential benefits.


7. You don't check your health plan for changes

Scrutinize group health plan offerings from employers each year during open enrollment, Rosen says. Don't assume the plan is still the same. Coverage levels, costs and networks could change from one year to the next, even if the plan is offered by the same insurer.

"If you're not sure about something and it raises a flag in your mind, then check it out," Rosen says. ( msn.com )

READ MORE - Seven costly health insurance mistakes

Ten things your insurance won't cover

Ten things your insurance won't cover - You're a good grownup. You have health insurance, life insurance, car insurance, and homeowner's insurance. Life can throw anything your way, and you'll be covered! Well, not anything. Each of the insurance plans that you pay premiums for every month have caveats and asterisks and fine print. Here are ten surprising things that you insurance probably doesn't cover.

Stuff in your car

If your car is broken into, your comprehensive coverage will replace the broken window. What it won't replace is anything that got jacked. The property in your car is covered instead by your homeowner's or renter's insurance, if you have it.

Nuclear disaster

If you live near a nuclear power plant and it has a meltdown and you are forced to abandon your house, your homeowner's insurance will not cover it.

Your shrink

Some health insurance policies have mental health coverage, but many do not. Before you get too comfortable on the therapist's couch, double check to see who will be paying for it.

Earthquake

Earthquake coverage must be purchased in addition to homeowner's insurance. Damage from tsunamis spurred by earthquakes is not covered (awesome).

Home healthcare

Some heath insurance plans will pay for home nursing care, but many won't. Check your policy.

Terrorism

Pre 9/11, many homeowner's insurance policies didn't mention terrorism. Post 9/11, most policies exclude acts of terrorism as a legit reason for filing a claim

Mold

If your house is infested with mold, it can mean health problems for your whole family; it might even mean abandoning your house. But it won't be a problem for your insurance company: your policy won't cover mold.

Floods

Earthquake insurance doesn't cover tsunamis, but flood insurance does. Again, flood coverage is an extra add-on that normal homeowner's insurance doesn't cover.

Sewer or sump pump backup

As a homeowner, few things might be worse than to find your house filled with sewage, except maybe that your homeowner's insurance won't cover it.

Reproductive medicine

Whether you want hormone therapy and in vitro to have a baby or a vasectomy so you can't have one, your health insurance likely won't cover it. ( bundle.com )

READ MORE - Ten things your insurance won't cover

Nine Secrets Health Insurers Don't Want You To Know

Nine Secrets Health Insurers Don't Want You To Know - Health insurance companies like to keep secrets. And they like to save money. Example: You have surgery, and weeks later you get a bill for using an out-of-network anesthesiologist. Ridiculous, right? You didn’t choose who put you under, so you shouldn’t have to pay extra. But your insurer sent the bill anyway, hoping you wouldn’t notice.

Fighting back against this kind of trickery—and winning—is a lot easier than you think, says Kevin Flynn, the president of Healthcare Advocates, a Philadelphia-based firm that helps patients wrangle with their health plans. We checked with Flynn and other insurance-industry insiders, lawyers, doctors, and regulators to uncover nine little-known ways to get the health coverage you deserve—for less.

Don’t pay if you don’t have a say

When you purposely see an out-of-network doctor, your plan usually makes it clear that it’ll cost you. But when you have surgery, the hospital chooses the anesthesiologist. If you get that annoying “out-of-network” bill, Flynn says, draft a strongly worded letter stating you had no say about the anesthesiologist—in-network or otherwise—and, therefore, won’t pay any additional fees.

“If you don’t have direct control, you are not liable,” Flynn says, adding that this tactic is likely to work every time, but few consumers know about it.

You may be eligible for more coverage

Depending on your state, you could be eligible for more benefits than your plan is telling you about. Take Maryland, for instance. Health plans operating there must pay for expensive infertility coverage. But one state over, in Virginia, they don’t. It’s unlikely that your plan is trumpeting info about state-mandated coverage, though. It’s up to you to get the scoop.

One good place to check is Families USA, a consumer group that keeps tabs on state rules, suggests Kevin Lembo, Connecticut’s official health-care advocate for consumers. Another option: Contact your state’s insurance commissioner.

To get tested, talk up your symptoms

Your insurer doesn’t want to pay for a colonoscopy if it thinks it’s not necessary. But if you believe you need one, here’s how to get it covered: Talk to your doctor in detail about your symptoms and why you think you need the test. Your plan has to pay for it if you have gastro complaints, health experts say. (Only 21 states require insurers to cover colonoscopies for general screening.)

Stall first, answer questions later

When Wendy Decenzo became pregnant with twins, she wasn’t worried about health insurance. Her husband, Chris, had made sure to get a health plan that covered pregnancy well before they started trying. But when Wendy began going for prenatal visits, coverage was denied. Their plan, Blue Cross of California, wouldn’t say why. Instead, the insurer asked the Decenzos to sign release forms allowing the plan to view their medical histories, which the law says are private.

Chris believes the company was looking for any info that the Decenzos may have accidentally omitted when they applied for coverage. If an omission were to be found, the couple might have been denied coverage. “It seemed like a fishing expedition in order to deny us,” Chris says. So they refused to sign, and three months later the plan started paying for the prenatal appointments, even going back and paying for earlier visits that hadn’t been covered. Flynn says lots of insurers try this trick, but since their review process usually lasts only 60 to 90 days, they often drop the inquiry after that. Sometimes, procrastination pays.

Letters are your best bet

It may seem a bit inconvenient, but the old-fashioned letter is by far the best way to communicate with your health plan. “Don’t do anything over the phone. It takes forever and when you’re done there’s no record of it, so it didn’t happen,” says Rhonda Orin, a Washington, D.C.–based attorney and the author of Making Them Pay: How to Get the Most From Health Insurance and Managed Care.

Letters almost always get a response, adds Lembo, the Connecticut health-care advocate. Some plans will answer email, but many won’t. And to whom, exactly, should you address your mail? Experts recommend following your plan’s appeal process for letters and sending copies to your state insurance commissioner. Also, keep copies of every letter you’ve sent your plan and everything they’ve sent back. That way, when your insurer says, “We never said we’d cover that,” you can say, “I have it right here in writing.”

Doctors can be good weapons

You just got four massage sessions, under doctor’s orders, for lower-back pain—but your insurer refuses to pay for them? Ask your doctor for help. He can tell the insurer he’s going to complain to the state board that regulates health plans.

“Health plans may not fear you, but they do respect the board,” says James Moss, MD, a retired Kentucky surgeon. He intervened on a patient’s behalf and, by pressuring the board, helped the patient win coverage. Another option: Say you’ll call your congressman and/or state Medicare office to lodge a formal complaint, Dr. Moss says.

Caveat: Don’t actually contact your state board yourself if a claim is denied. Janice Weiss, a Jupiter, Fla.–based attorney who fights health plans for consumers, says some of her clients who went this route ended up hurting their cases when the state agency ruled their claims invalid; that left them little recourse with their insurance companies. Instead, while working your plan’s appeals process, just suggest you may take the matter to your state.

A little research can go a long way

If you want a special CT scan or MRI, your doc probably won’t authorize it unless it’s an absolute must. Persuade her with expert info from the American College of Radiology's Appropriateness Criteria, says Anne Roberts, the executive vice chair of the department of radiology at the University of California, San Diego.

Used primarily by doctors but open to the public, it’s an up-to-date list of the types of imaging that are right for various conditions. Arming yourself with the info doesn’t guarantee coverage, but it’s a proactive step in the right direction.

There are ways to get drugs cheaper

Doctors are often wowed by the latest and greatest drugs, which tend to be the most expensive. Make sure these newer, high-end meds are what you need before you leave the doctor’s office. Sometimes your insurance plan won’t pay for them at all; other times it’ll charge higher co-pays.

In many cases, drugs have generic versions that are just as effective but cheaper than the newer ones. Always ask your doc (or pharmacist) for generics. And if you really need a medicine that doesn’t have a generic version, order it by mail. Many plans have a less-expensive mail-order pharmacy option. Another prescription trick for people who have chronic conditions like allergies: Ask your doc to write you a prescription for two or three months’ worth of medication instead of one. Good-bye, extra co-pays.

An advocate can help you win

Imagine being turned down for coverage after running up $125,000 in medical bills. That’s what happened to the parents of a daughter with anorexia just before they sought help from Kevin Flynn, of Healthcare Advocates. For $400, he took over the fight with their insurer and—after a year’s worth of combat—won.

Flynn is a patient advocate, part of a growing industry that makes its money from helping you. Some advocates help you interact with your doctor, while others specialize in insurance disputes. Most of all, firms like Flynn’s keep the letters going out on your behalf, saving you time, energy, and headaches. “The insurers know that advocates know the laws, the regulations—things a regular consumer might not know. That makes them nervous,” Flynn says.

Advocates can even get policies changed. One of Flynn’s clients, who had rectal cancer, was having trouble getting his insurance plan to pay for a new radiation therapy. The insurer claimed the treatment wasn’t ready for prime time, but Flynn found six studies showing its usefulness for the disease, got the coverage—and got the insurer to rewrite its policy.

To find an advocate, contact the Patient Advocate Foundation, says Laura Weil, the interim director of Sarah Lawrence College’s Health Advocacy Program. Another helpful resource is the Society for Healthcare Consumer Advocacy.

Also try checking with the medical association for a particular condition, like the Multiple Myeloma Association or the National Association of Anorexia Nervosa and Associated Disorders; many of these groups keep lists of advocates. ( shine.yahoo.com )

READ MORE - Nine Secrets Health Insurers Don't Want You To Know

is your body fully covered?

is your body fully covered? - As medical insurance costs rise, we show how you can reduce the bill - With reports this weekend that the NHS will face a funding gap of around £6 billion a year by 2015, many may be worried that this could lead to longer waiting lists. However, the luxury of private medical insurance is beyond the pockets of many people; and with companies keeping a tight grip on their purse strings, such employee benefits are harder to come by.

One cheaper alternative is a cash plan. Although we have a free NHS, many of us find ourselves paying for medical treatment, be it regular trips to the dentists, optician, prescription charges or treatment by an osteopath. Merely going into hospital can be expensive when you take into account the parking fees, telephone charges – even the need to buy a card to work the television.

Most health care cash plans do not require a medical Photo: Clara Molden

This is where the cash plan comes in. For a modest monthly fee, these will pay a limited contribution towards such charges. WPA has this week relaunched which it now calls an "NHS top-up plan". For £21 a month subscribers can claim up to £150 in dental and optical costs a year, or £300 towards "complementary therapies".

For the first time, those staying in hospital can claim towards visitor car-parking costs, too; though there is no cover for prescription charges. The company also offers a lower level cover, which costs £7.76 a month, although the amount you can claim towards each benefit is reduced.

With a cash plan you arrange the treatment, pay for it in full, then send off the receipt to reclaim any payment due. But watch out for time limits on claims and exclusions. Most plans will insist you need a GP referral to validate claims, and some will stipulate you inform the cash plan provider before having treatment.

There is usually a qualifying period of between one and six months before you are eligible to claim. This is to prevent people taking out a policy to cover an existing illness, claiming the cash, then cancelling the policy.

Most health care cash plans do not require a medical. However, any existing health problems are unlikely to be covered.

For those looking for an alternative to the NHS, comprehensive medical insurance should pay for private consultations, diagnostic tests, treatment and surgery in a private hospital, should it be required. Not only can this reduce the time it takes to get treatment, it can also give patients more choice as to when and where that treatment is given.

Medical insurance offers additional "home comforts'' to hospital stays: for example staying in a private en suite room, rather than on a larger, and sometimes mixed, NHS ward.

But this cover does not come cheaply. Advances in medicine have pushed health care costs up at a faster rate than inflation, and these rising costs have meant steep premium increases in recent years.

Most insurers will also raise the cost of cover as policyholders age, to reflect the increased chances of them making a claim: someone aged 70 is likely to pay about three times as much for cover as someone aged 35. Meanwhile, a standard policy from BUPA for a healthy 45-year-old costs £55 a month.

Remember that even the most comprehensive medical policy will leave you relying on NHS care in many circumstances. Most policies do not cover emergency treatment. Likewise, having a private policy does not allow you to bypass your GP. It is only if your doctor refers you for more tests or to see a specialist that your insurance will kick in.

Private policies also do not cover the treatment of "chronic'' ongoing conditions, such as asthma or multiple sclerosis, nor do they cover routine medical care needed during pregnancy or childbirth, or infertility treatment.

In addition, any medical conditions you have at the time of taking out the policy (or have previously had treatment for) won't be covered.

But there are ways of reducing the cost of this insurance. To keep premiums low, most insurers have designed "budget'' policies, to appeal to consumers who want the benefits of private cover without paying the full price. Many of these are designed to work in parallel with the NHS.

BUPA offers a policy that covers just heart and cancer conditions; other policies cover routine hip replacements, varicose veins treatments and so on, but do not provide cover for cancer. WPA insurance offers a "shared responsibility plan", where policyholders pay a fixed proportion (25 per cent) of any claim; it also offers one policy which has an excess of £1,000 – again, significantly bringing down the cost.

Axa PPP offers a plan where you can only claim on the insurance policy if NHS treatment is not available within six weeks; this is aimed at those whose primary concern is not having to wait for treatment.

Most insurers also offer budget plans that restrict hospital choice, or restrict cover, so some outpatient treatments (such as physiotherapy) may not be covered. There are also policies that pay for diagnostic tests, but not certain operations; and others that pay for the operations but not the tests.

Those keen to cut the cost of cover should check if their employer offers medical insurance, as this can work out cheaper. Many are non-contributory (your employer pays the premiums), although you will be taxed on this benefit. Some will offer the opportunity to cover a spouse, or children, at a reduced cost.

Even if your employer asks you to contribute to the cost, this is likely to be less than the price you would pay if you bought a comparable policy on the open market.

Given the plethora of choice in the medical insurance market, anyone considering cover should read the terms and conditions carefully, particularly if they are opting for a lower-cost plan. Make sure you fully understand why the policy is cheaper, and ensure it still meets your needs. ( telegraph.co.uk )

READ MORE - is your body fully covered?