Health cash plans: how do they work and are they worth it?

If you regularly pay out for routine health treatments, such as dental or optical care, physiotherapy or chiropody, health cash plans could help you with the cost.

Whether you’re on a fixed income or managing your money more flexibly, a health cash plan can help with the monthly budgeting by reimbursing many of the semi-regular ‘low ticket’ health expenses that are not covered on the NHS.

What’s on this page?

• What are health cash plans?
• How much do health cash plans cost?
• What does a health cash plan cover?
• Health cash plans: Pros and cons
• Are health cash plans worth it?
• How do health cash plans differ to medical insurance?
• Where can you buy health cash plans?
• What to check before buying a health cash plan

What are health cash plans?

A health cash plan is a type of low-cost insurance where you claim back money for routine treatments, such as dental check-ups, eye tests, glasses, chiropody and physiotherapy.

You pay a monthly premium, then every time you are eligible, for example after a visit to the dentist or optician, you can make a claim (online or by post) to your cash plan provider. You normally need to provide a receipt. The payout goes directly into your bank account.

Plans typically pay a proportion of each claim up to an annual limit per type of treatment, so you may not be fully reimbursed. For instance, the plan might cover £115 towards the cost of prescription glasses or £90 towards a dental check-up and hygiene appointment each year. Or if your plan covers 75% of dental costs up to an annual limit of £100, and your dental check-up costs £70, you could claim back £52.50 for that visit (75% of £70). Some plans might pay 100% of NHS dental treatment.

The earliest health cash plans predated the creation of the NHS in 1948. They were originally provided by charitable and non-profit organisations for the benefit of their workforces.

Today, demand for health cash plans continues to grow. According to health care analyst LaingBuisson, 2.89 million people in the UK had the policies in 2023. This was an increase of almost 5% on the previous year – although many of those were policies provided by an employer.

Rebecca Ward, head of health and protection at the Association of British Insurers, explains: “Health cash plans can cover a range of routine and unexpected treatments. With enhanced cover available for specific conditions or types of care, these plans can support your wallet and your peace of mind. As ever, it is important to shop around and get a policy that meets your needs.”

How much do health cash plans cost?

Health cash plans typically cost £15 to £60 a month, depending on the level of cover, if it’s a single or joint plan, and extras (like 24/7 GP access or specialist therapies). Unlike medical insurance, the cost of a health cash plan isn’t usually linked to your age. That said, once you pass your 70th birthday, the number of available plans is more limited.

Michelle Cooper, Director of Health and Travel, Saga Insurance, says: “These plans only offer value if you use them. Unlike with health insurance, where you might feel you’re paying partly for peace of mind (in case you do need major treatment), the smaller amounts involved in cash plans mean they’re only worthwhile if you get back more than you’ve paid in premiums.”

What does a health cash plan cover?

Plans vary, so make sure you choose one that matches your needs.

Typically, it might include:

• Dental cover: Reimbursements for check-ups, hygienist visits, fillings, and dentures.  
• Optical care: Eye tests and help towards the cost of glasses or contact lenses 
• Therapies: Cover for physiotherapy, chiropody, osteopathy, and sometimes acupuncture or homeopathy. 
• Hospital stays: Daily cash payouts for overnight hospital stays – whether NHS or private. This helps cover extra costs like travel, meals, or lost income if you are still working. 
• 24/7 GP helpline and counselling: Access to a GP by phone or video. This can be helpful if it’s hard to get an appointment with your own doctor. Mental health support and stress counselling can also be included. 
• Specialist consultations/tests: Some plans offer limited reimbursement (often a specific cash amount) towards private diagnostic tests or specialist visits. This won’t cover the full cost of private treatment but can help with an initial consultation if NHS waits are long. 

These plans aren’t designed to cover cosmetic surgery, laser eye surgery, or non-prescription treatments.

Health cash plans: Pros and cons

Pros: 

• Helps budget for routine healthcare. 
• Can save money if you claim regularly. 
• Often includes benefits like 24/7 GP access. 
• Premiums usually not age-related (until older ages for joining). 

Cons:

• Only worthwhile if you make claims worth more than your premiums. 
• Doesn’t cover major medical events or surgery. 
• Annual limits on claims for each category. 
• Requires organisation to keep receipts and submit claims. 
• Benefits don’t roll over if unused. 

Are health cash plans worth it?

Health cash plans can be good value if you regularly spend money on routine treatments – but you need to be organised by keeping your receipts and ensuring you submit claims.

One way to see if a plan could save you money is by reviewing your routine healthcare spending over the past couple of years. But do factor in how that might change in future, too.

Saga’s Michelle Cooper says: “Bear in mind that the value you get from a cash plan could go up or down as you get older. For example, the NHS covers prescriptions and eye tests from age 60. Dental examinations are free to over-60s in Wales (and they’re free to everyone in Scotland). But as you get older you might be more likely to need services like chiropody or podiatry, or other types of treatment that might be covered by a cash plan.”

If you’re unlikely to claim back more than the plan costs, you could always self-insure – moving the same amount each month in a high-interest savings account instead. You’ll have a pot to dip into for minor treatments and keep the money (with interest) if you don’t need to call on it.

Make sure you check how much the cash plan will provide cover for. For example, if you expect to have frequent dental treatment or major procedures, like root canal work or dental implants, not all plans will cover this.

Or a specialist dental plan, or a health insurance policy that includes dental cover, could be a better fit. And if you have private medical insurance, you may already be covered for the same treatments, so check your policy to avoid doubling up.

Ultimately, the ‘worth’ of a health cash plan is a personal calculation. By reviewing your typical health spending and comparing plan benefits against premiums, you can make an informed decision.

Where can you buy health cash plans?

You may be familiar with health cash plans as part of an employee benefit package, but plenty of providers also offer policies direct to consumers. If you still have access to a workplace scheme, it’s well worth checking it out, as the costs to you are likely to be lower.

You can’t shop around for cash plans on the usual insurance comparison sites. But Money Saving Expert does have information about which cash plans it considers best value, including for over-65s.

What to check before buying a health cash plan

• Pre-existing conditions: Most plans don’t require a medical regardless of age, but you must declare any existing health conditions. 
• Waiting periods: Some treatments (especially related to pre-existing health concerns) may have a waiting time before you're covered. 
• Some plans have an upper age limit for joining a policy for the first time. Fewer policy options are available if you’re looking to join for the first time after age 70.  
• Annual limits and what treatments are included: Allowances reset yearly – you can’t carry them over. If you don’t use it, you lose it. Claims usually need to be made within three months, so you need to be organised.