THE arrival off BUPA on the Irish health insurance market will certainly offer Irish consumers greater choice, but no one should assume that it, or VHI, will cover them fully for every health-related eventuality.

British consumers, who have had a wide range of health insurers to choose from for many years have discovered that the ever increasing advances in medical technology and treatment has come at a cost - a cost price which the big health insurers are frantically trying to keep under control by strict interpretations of both the medical condition itself and contract benefits.

According to recent press reports, insurers in Britain, including BUPA, have adopted a system of managed care. This system was developed in the United States, and involves careful monitoring of a patient's claim before any treatment is started. This pre-authorisation of treatment by the insurer can involve seeking from the GP or consultant exactly how many days the patient will be in hospital, very specific details about drugs and other treatments from the hospital administrators, or at the extreme end, the querying and possibly denial of cover for in-patient treatment in favour of cheaper out-patient care.

British and US insurers claim the pre-authorisation, managed care system, is the best way to eliminate waste and keep costs under control. Critics (most often doctors) say it takes flexibility and control away from the medical experts and gives it instead to insurance clerks whose only concern is the bottom line. Patients, they say, could be forced out of hospital sooner than is good for them because the doctor or consultant was forced to state how many days the treatment would take at the pre-authorisation stage. What is not in dispute is that in order to meet the rising expectations of private patients there has to be better management of existing resources.

Pre-authorisation to this degree does not operate in the Republic, though clients are often recommended to ensure they are covered for certain treatments. Private health care users - whether in Britain or Ireland - need to bear in mind that while their health insurance plan offers a chance to beat public hospital and treatment waiting lists it cannot meet the costs of all medical treatment and the full economic costs of being ill.

All private health plans have exhaustive exclusion clauses for preexisting conditions and may not pay benefits if such a condition arises or is triggered as a result of treatment for a different ailment. Chronic conditions that require considerable out-patient attention may not be fully covered by your private insurance. Consumers need to read all the clauses carefully before they buy into any plan and should consider discussing their particular situation with their GP in order to have a clear idea of the sort of future care and attention they may need.

Neither BUPA nor VHI offers any payment towards regular dental or optical treatment and place careful limitations on other outpatient payments or for nursing home care. BUPA's cash-back option (where you take the cash rather than upgrade your accommodation) is only payable for in-hospital stays. Consumers who want more comprehensive coverage should, in addition to private medical insurance, investigate the health care cash plans such as the Hospital Saturday Fund and the Hospital Savings Association.

These companies offer three or four cash-back options, depending on which payment level you choose. For a single weekly payment cash benefits will apply for every member of the family towards the cost of overnight and day hospital stays, nursing home stays, consultations, optical and dental treatment, ambulance service, some homeopathic treatments, psychiatric treatment, etc. They even give once-off grants to maternity patients.

BUPA's Essential Plan, which covers ala medical costs and semi-private accommodation in 63 different hospitals costs a basic £172.27 a year. Add the Protection 1 cash option and the BUPA cover rises to about £231 for anyone between age 19 and 50. This will give you a £30 a night cash-back option, if you so choose, for every night you spend in hospital.

Under the HSA cash scheme, for example, if you pay £2.60 a week, you (and/or your spouse) will receive £18 for every night you spend in a hospital or nursing home, here or abroad and your children will receive £6 per night. HSA will also pay up to £100 a year towards consultations, up to £160 a year each towards homoeopathic treatments, up to £44 each towards dental treatment and up to £48 each towards optical care. Maternity cash benefit is £180. Under the HSF £2 a week plan, the main contributor receives £32 a night while dependents receive £16 a night. That scheme pays up to £400 towards the first specialist consultation and towards other investigations over a year; up to £100 for dental and optical benefits over two years and up to £200 towards homoeopathic treatments over a two-year period. Maternity benefit is £200.

The BUPA customer who takes out the Essential plus Protection 1 policy and HSA's £2.60 a week cover, would pay a total of about £366.00 a year. But for that they could receive nearly £50 a night for every hospital stay, plus the various other non-hospital cash benefits. The BUPA customer who takes out the HSF plan would pay even less - £335 a year - and could potentially enjoy a cash rebate of £62 a night. Five nights in hospital in any given year would recoup the entire cost of the BUPA/HSF combined plans; seven nights would do the same for a BUPA/HSA combination.

The added benefit of HSF membership at the moment is that premiums enjoy 27 per cent tax relief. HSA has still not secured the tax relief for its plan and BUPA is still waiting for tax relief approval for the cash benefit options. VHI does not offer any cash return option, but VHI's Plan B, in combination with the same HSA or HSF plans amounts to a very similar gross cost to the BUPA examples - and it enjoys full tax relief on total premiums.

Family Money will be returning to this important issue in the coming weeks and welcomes comments from readers who may be reassessing their own health insurance cover. Meanwhile, in our article last week about BUPA, we stated that VHI did not offer any extra contribution toward maternity consultations. In fact it pays £40 towards a consultation.