Cash plans are a low-cost way for consumers to supplement their health cover, according to Mr Aongus Loughlin of Mercer Human Resources.Cash plan schemes, available from the Hospital Saturday Fund and the Hospital Savings Association, pay out a certain sum to people who are hospitalised and also cover some out-patient costs.
"People see it as a complement to VHI or BUPA. They cover the big ticket stuff," says Mr Loughlin.
"If you spend two days in Vincent's Private Hospital, under VHI or BUPA you would be covered for the cost of that. But under a cash plan, you will get €60 or €70 a day."
This can be spent on anything from new pyjamas to emergency childcare arrangements, or it may compensate for a loss of earnings - "whatever you want", explains Mr Loughlin.
Cash plans cost up to €240 a year, but a family can buy a cash plan for €110 a year. "The more you pay for your policy, the more you will get back," he says.
In the UK, around two million people own cash plans. Here, 140,000 to 150,000 buy them. But employers who pay for their staff's health insurance are increasingly using cash plans as a way to extend the benefits they offer at a marginal cost, Mr Loughlin says.
"It's when you have children that these things really come into play, because there are GP visits, sports accidents, lots of small injuries," he says.
VHI and BUPA cover a selection of out-patient benefits under their main plans, but the excesses are high.
Under VHI's Plan B, consumers pay the first €310 of any claim for out-patient services, while under Plan B Options and BUPA's Essential Plus, the first €220 of any claim is payable.
In recent years, however, both companies have introduced products that cover out-patient expenses with no excess payable.
BUPA's Health Manager plans include a 50 per cent refund on out-patient expenses as part of an overall health insurance plan.
VHI's Health Steps products are similar to cash plans in that they can be purchased as an add-on to its main products.
Health Steps Silver costs €129 for an adult and €387 for a family of two adults and two children. Health Steps Gold is priced at €199 for an adult and €596 for a family.
Consumers receive €20 under Health Steps Silver and €30 under Gold for an unlimited number of GP visits, while payment will also be made toward the cost of visits to medical professionals such as dentists, consultants, physiotherapists, speech therapists, chiropodists and some alternative medicine practitioners.
Consumers can also claim tax relief at their marginal rate on medical expenses that have not been reimbursed under any scheme.
Compensation payments or any sum received from a health board is also deducted before the relief is calculated.
The first €125 of expenses incurred in any tax year is not eligible for the relief, which can be claimed by sending form MED 1 to the Revenue Commissioners. Sight testing and routine dental treatment do not qualify for the relief.
For 42 per cent taxpayers in particular, the relief may significantly lower the burden of everyday healthcare expenses.
It is believed, however, that thousands of people do not bother to claim.
