HSA’s policies need attention

Charedi and other savers should no longer tolerate insurers who do not insure

By Geoffrey Alderman, June 4, 2009

The Hospital Savings Association (HSA) was founded in 1922, long before the establishment of the National Health Service. The HSA was then merely one of a large number of quasi-charitable bodies — many of them associated with the trade-union and friendly-society (including Jewish friendly-society) movements — that provided access to quality medical care in return for a modest weekly outlay. In the case of the HSA, this outlay amounted to three (old) pence per week. At that time, workhouse hospitals catered for the poor, and private hospitals for the well-to-do. A skilled manual worker might then earn around two pounds a week, so the HSA was pitching itself very much at this end of the market, making it possible for “respectable” working-class folk to avail themselves of hospital care as and when needed without the stigma of entering the workhouse.

With the establishment of the National Health Service in 1948, the rationale for the continued existence of organisations such as the HSA was naturally called into question. Many of them managed to survive by offering a range of cash benefits, covering not only hospital stays but also optical and dental treatment and a range of other medically related benefits. And when, in 1951, the post-war Labour government started to impose charges for NHS services, the HSA’s future was secured. The weekly outlay is not now as modest as it once was, but it is still cheap. Its basic “Health Cash Plan” will set you back a mere £9.75p a month; in return you will be entitled to claim (up to an annual limit) for dental and optical costs, chiropody treatments and complementary therapies, as well as daily payments if you need to stay in hospital. By “you” I mean the principal contributor and any dependent children under 18 years of age and residing with you.

I would be the first to admit that this is good value for the average family. It is even better value for the non-average family, and among our Charedi brethren (bless them!) there is a very large number of non-average households, where 10, 11 and 12 children are the norm. In such households, dental and optical bills can mount up very quickly, as the HSA has discovered to its cost.

Charedi families in north London are now finding that their HSA claims are being investigated and refused and their HSA memberships abruptly terminated. Indeed, the HSA now makes it clear that its Health Cash Plan will no longer cover all dependent children under 18, but only four of them; the rest can still be covered but only on payment of an additional premium.

A (Jewish) insurance-broker friend of mine, with whom I discussed this sorry tale, evinced a certain sympathy for the HSA — but not much. Nor do I. I am not accusing the HSA of anti-Jewish prejudice. The HSA provides a financial service and needs to ensure that its projected outlays are more than covered by the subscriptions it receives. Like any insurance company (for that, in practical terms, is what it is), it is entitled to adjust its premiums, and to decline to renew policies that pose inordinate risk.

There is no law requiring the HSA to accept an application — though it needs to have a sound reason for declining one. But that is very different from its refusal to meet claims under existing policies, which is what it appears to have been doing, or seeking to rewrite policy contracts that it has already entered into.

At this point, I must make a personal declaration. For many years, my wife and I were HSA members. In 2003, it refused to meet a claim for spectacles dispensed to me by my optician in New York, arguing that although (as I had pointed out) the cost of these spectacles may well have been less in New York than in London, its policy wording excluded claims arising in the USA. I argued against this interpretation and, eventually, as a “goodwill” gesture, the HSA relented. Subsequently, the HSA altered this particular wording and, as a direct result, Marion and I took our business elsewhere.

I urge those of you who are still HSA members to follow this example, and that set more recently by Rabbi Avraham Pinter, and do the same. Meanwhile, let’s hope a lawyer will offer her or his services pro bono to compel the HSA to recognise the appalling nature of its attitude towards some of its customers.

Last updated: 11:57am, June 4 2009