While the UK benefits from free healthcare, NHS waiting times can be painfully long, with many people taking out private medical insurance so they can beat the queues.
Around 13% of UK consumers have some form of private health insurance, according to Finder, and some brokers are reporting sharp increases in take up in recent months. This may be because the coronavirus pandemic has prompted more of us to think about healthcare and the different options available to us.
Deciding whether you need private health insurance is a personal choice for those who can afford it, and while the NHS is invaluable, it is under huge pressure, which can mean the wait for treatment of non-urgent conditions is often agonisingly long.
Here, we outline what private health insurance is, what it usually covers and some of the pros and cons to help you decide whether this type of policy is right for you.
How does private health insurance work?
Private medical insurance, otherwise known as health insurance, is a type of insurance designed to cover most of your medical bills if you are treated privately for certain illnesses and injuries during your policy term. You will pay a monthly fee (known as a premium), the cost of which will vary depending on the type of cover you select, along with other factors such as your age and health.
Private health insurance is mainly designed to pay out for short-term, acute but curable conditions and illnesses that you need treatment for during the policy term.
What does private health insurance cover?
The specific conditions covered by your policy will depend on the provider and the level of cover you choose. There are some procedures that are usually covered as standard by private medical insurance, which include:
- Treatment for acute injuries or illnesses, such as viruses or infections
- Most inpatient treatments – any treatment that means you need to stay in a hospital or facility for at least one night. This covers a wide range of possible treatments, but generally will include: surgery, pre-surgery tests
- Mental health therapies and counselling – treatments for mental health conditions including depression and anxiety are increasingly being covered by private medical insurance.
The majority of policies will not provide cover for:
- Organ transplants
- Pre-existing medical conditions – it may be possible for you to add an exclusion to your policy for certain pre-existing conditions
- Normal pregnancy and childbirth costs
- Elective treatments such as cosmetic surgery to improve your appearance
- Injuries relating to dangerous sports or arising from war or war-like hostilities
- Chronic illnesses such as HIV/AIDs-related illnesses, diabetes, epilepsy, hypertension and related illnesses.
It’s important to read the fine print of any policy you intend to take out, as the treatments, illnesses, conditions and injuries covered by different policies will vary from provider to provider. It’s also worth checking whether your employer offers private medical insurance as an employee benefit before buying standalone cover.
Pros and Cons of private health insurance
Pros
The specific benefits you get will depend on the policy you choose, but generally, the main advantages of private health insurance are:
- Shorter waiting times
- Increased choice of treatment centres and practitioners – with private health insurance you may have more control over the specific people and places you receive care from
- Access to drugs and treatments that may not be available on the NHS – certain treatments and drugs will be available through private medical insurance before they are available on the NHS, if at all
- More privacy when being treated – you will often have your own room with an en suite bathroom when being treated privately, rather than being on a multi-bed ward with shared facilities
- Specialist referrals on request
- Extended aftercare and physiotherapy services which may not be offered on the NHS
Cons
- Private healthcare does not always mean better healthcare. The NHS usually provides an extremely high level of service, which in some cases can be better than private healthcare. If you have a serious illness such as cancer, heart disease or stroke, you’ll get priority NHS treatment.
- Chronic or incurable illnesses are not typically covered by private health insurance – including some cancers
- Injuries from dangerous sports are also not covered
- Depending on the policy you take out, the treatment you want may not be covered
- Cover can be expensive and prices are likely to rise further as you get older. A typical family premium (for two adults in their 50s with two teenage children) could cost £2,500 or more per year. Premiums will usually rise every year, so by the time you’re older and more likely to need hospital treatment, cover may be unaffordable.
Where to buy private medical insurance
There are two main ways to buy private medical insurance.
You can either go directly to a health insurance provider or you can ask a health insurance broker or advisor to help you find the right cover to suit your needs.
It might seem that buying private health insurance online is the cheapest and quickest option, but there are so many terms and conditions in private health insurance policies that it’s usually a good idea to seek professional advice on the best option to suit your needs.
Are there any alternatives to private healthcare?
If you want or need private healthcare at any point, but haven’t paid for private health insurance, there may be other options available to you.
For example, you might decide to ‘self-insure’ and use savings for all or part of your medical costs. Around one in four private patients do this, with estimates that this number will continue to increase. Hip and knee replacements can cost anywhere between £10,000 and £14,000 cost an average of £10,000 each, while MRI scans cost from £300. Scan prices will vary and you can shop around to find the best price. Your GP will help you do this.
If you want an expert or second opinion, you can pay for a private consultation, and if you need treatment, your consultant can refer you back to the NHS.
Ways to reduce the cost of private health insurance cover
While private health insurance can be expensive, there are a few ways that you can reduce the cost of your monthly premiums:
1. Opt for a bigger excess
With most insurance coverage, the higher the excess (the portion of the claim that you must pay yourself) you agree to pay, the cheaper your monthly payments are likely to be. If your excess is £0, changing this to £250 could reduce the cost of your monthly premiums by as much as 20%, with this percentage increasing as you agree to pay more excess. Make sure the excess you choose remains affordable though, otherwise you might struggle financially in the event of a claim.
2. Six Week Wait Option
This option means that if you need any form of inpatient treatment and the wait time on the NHS is six weeks or less, that you will use the NHS for that treatment. This will mean you are less reliant on private medical services and will benefit from lower monthly premiums as a result.
3. Reduce your hospital list
When you buy private health insurance, you will usually select a number of different hospitals that you would like to be treated in. Some insurers may allow you to pay more to have a wider range of options, so it’s worth checking if you are paying for this, or if you could reduce the number on your list to save yourself some money.
4. Maintain a healthy lifestyle
When you apply for private health insurance, you’ll be asked a number of questions about your health which will be taken into account when your premiums are calculated. Your insurer’s view is that the healthier you are, the less likely you are to need medical services and the cheaper your insurance will be. So, if there is room to improve your health, such as stopping smoking, eating five a day, or making exercise part of your daily routine, you may be able to reduce the cost of your premiums.
5. Shop around
With so many different providers of private health insurance available, it pays to consider a variety of options. If you want to find out how much private health insurance might cost you, or explore ways you can keep costs down, we’ve partnered with Active quote so you can compare quotes and arrange cover online. The service is free to use.
6. Know the level of cover you have
Most insurers provide a range of private medical cover, with some covering the bare minimum and others covering pretty much every possible scenario. You may be paying for services that you are unlikely to use, so it is worth checking what level of cover you have and whether you could look at a more basic option. This may include taking off options for outpatient treatments such as therapies, scans, tests or consultations.
7. Check before you claim
Claiming on any insurance is likely to increase your premiums going forward. If you are worried about the cost of your cover, then before you make a claim, consider how it might impact your premiums. If you need a routine appointment or some small procedure, it may be worth either using the NHS or paying for it yourself as many insurers won’t take into consideration the size of the claim so it could end up costing you more than the treatment was worth.