Cash plans which offer only optical and dental benefits will fall by the wayside, according to a researcher analysing the market.
Ian Youngman, the author of a new report, Health Cash 2001: A market guide to health cash plans and providers, believes the six or so `stand alone’ cash plans which offer only dental and optical benefits are not worth the money.
However, he says that the market is growing for more comprehensive cash plans policies that offer benefits across a wide range of conditions.
The report concluded that any intermediary who doesn’t understand or is not using the cash plan market is missing out.
Youngman said: “I think health cash plans are a good idea but I’m not sure people are prepared to pay for the `stand-alone’ policies. I don’t think there’s an enormous market.
“They are ideal for pensioners but illogical because they don’t pay for these services anyway.
“They are not viable because of the administration costs for a small premium. The whole thing doesn’t add up and I wouldn’t be surprised if they fall by the wayside.”
Medex offers a `stand-alone’ plan called Optident. Office administrator Paul Callow said: “I would disagree. There is a large market for it. People know they need glasses or dental cover and with our plan, there is no penalty in claiming.”
Boots offers a dental insurance plan which is an indemnity policy – similar to a ‘stand alone’ cash plan policy – where customers can claim back up to a limited amount which is paid per month.
However, this scheme is unlike other capitation plans because there is no initial consultation from which the premium is based.
Boots sales and marketing manager Sandra Methven said: “More people are turning to private dentistry as a way of looking after their oral health.
“Our plan offers a choice of private or NHS treatment and helps them budget for those expenses.
“We get many people returning year after year.”
See in-depth feature on cash plan market, page 37 this issue.