There is much to consider when choosing a private health plan. As well as selecting an affordable deductible, you need to think about whether you need dental cover and the extent to which you require outpatient cover to accompany your inpatient cover.
On top of these factors, you also need to ensure your plan comes with a plan limit with which you are comfortable.
What is a plan limit?
A plan limit, which some insurers call the annual limit, is a cap on how much your health insurer will payout within a year.
Plan limits are not transferable and do not carry over. For example, if you have an annual plan limit of USD 3 million, and make no claims, your plan limit won't double to USD 6 million upon renewal.
As well as being monetary, plan limits might apply to the number of visits or treatments you can undergo during the year. For example, you might have a financial plan limit for dental treatment, while also being limited to four treatments, or four claims from your insurer, per year.
How can I find out my plan limit?
Your health insurer will outline your plan limits in your documentation, like your member’s handbook.
If your insurer offers online plan management or features like a mobile app, you will usually be able to find details of your plan limit here, too.
If you’re looking for a new health plan, insurers should outline the relevant plan limits on their website or in any documentation they provide.
How are plan limits applied?
As well as knowing limits to the frequency with which you can seek treatment or make claims within a year, monetary plan limits may also apply in respect of specific treatments.
For example, let’s again say you have a plan limit of USD 3 million.
That value would apply to your whole plan and all treatment you seek and medical costs you incur throughout the year.
However, you might also have specific limits relating to various treatment types. For example, you may have an annual limit of USD 100,000 for kidney dialysis or treatment for organ transplantation.
The full plan limit of USD 3 million would still be in place, but you are capped to any amounts placed on specific treatment types.
What happens if my treatment costs surpass my plan limit?
When you surpass your plan limit, you will need to cover the remainder of your medical costs for the rest of your cover period.
Remember, plan limits are not transferable. If you surpass your plan limit two months before the end of your plan, you couldn't renew and use next year's plan limit to continue paying your medical bills.
Does my plan limit still apply if I can get a full refund for specific types of treatment?
Some treatments won't have an annual limit, meaning you can get a full refund regardless of the total treatment costs. In some cases, you will be able to get a full refund even for ongoing treatment, such as chemotherapy, assuming cancer wasn’t a pre-existing condition.
However, your overall plan limit would still apply. Any costs you incur for treatments where you can get a full refund would contribute to your overall plan limit. Therefore, entitlement to a full refund for specific treatments is really entitlement to a full refund on your medical costs up to the value of your overall plan limit. If you are at any time receiving treatment for more than one condition, you would also need to consider whether this would take you close to your plan limit.
What is a lifetime plan limit?
Lifetime plan limits are a cap on what insurers will pay towards your treatment during your lifetime.
Some insurers in certain countries apply overall lifetime plan limits. However, it is more common to find lifetime plan limits apply to terminal illnesses only.
In this case, you would have your overall plan limit and a specific lifetime plan limit that would apply if you're diagnosed with a terminal illness. This limit would, however, only apply to treatment related to that illness.
How can I change my plan limit?
You will usually not be able to change your plan limit within an existing plan. Typically, you would need to change to a different plan, which may change your plan limit.
How does changing my plan limit affect the cost of my private health plan?
Typically, more comprehensive private health plans will have a higher plan limit to cover the broader scope and treatment types you may undergo. As you may have outpatient, dental, or maternity cover added to your plan, it makes sense that your plan limit would be higher. However, the plan limit itself isn’t usually a specific determining factor that influences the cost of your health plan.
You can learn more about the factors that do influence the cost of your private health plan here.
Does changing my deductible change my plan limit?
It’s unlikely that your deductible would ever influence your plan limit, as they are two separate things and are unrelated to each other.
However, opting for a higher deductible may make a plan more affordable and allow you to choose one with a higher plan limit.
Still, when choosing a deductible, you should always first consider what you can afford to pay should you need to undergo treatment of any kind.
Understanding your plan limit and getting the right health plan for your needs
Plan limits are so high that it’s easy to dismiss them as something you’ll never have to worry about.
In many cases, this will be true. However, it's worth being aware of your overall plan limit and what plan limits apply to specific treatments. Especially so if limitations apply to how often you can claim for particular treatments as well as the amount you can claim.