How does private medical Insurance work in the UK?

You’ve heard about private medical insurance, but what is it, how does it work and is it worth exploring?

In a nutshell, private medical insurance is like Ronseal – it does exactly what it says on the tin.

Rather than relying on the National Health Service for the healthcare or treatment you need, your insurance allows you to use private providers, who are generally able to provide you with quicker treatment, with more flexibility, in a nicer environment.

What is private medical insurance?

Private medical insurance is usually a monthly premium that you pay out of your bank account to your insurance provider which means that if you need treatment while your policy is active, your insurer will pay for it.

Depending on your policy, you can use it for treatment, tests, surgery and procedures.

Some people choose to exclusively use private healthcare instead of the NHS. In contrast, others will use a mix of the two, going to their NHS GP for more routine ailments, and using their insurance for more complex or severe problems.

The pros and cons of private medical insurance

PROS:

• Quicker treatment, which means no waiting around for operations and procedures
• A more extensive range of treatments. It’s possible to get treatments done privately that aren’t available on the NHS
• Better facilities. Private hospitals generally offer higher quality amenities
• More freedom over your treatment. With the NHS, you’re not able to pick and choose where you receive your treatment, or who you receive it from.  But with private medical insurance, you can usually pick specific locations and staff to provide your care.

CONS:

• It costs money.  Clearly private medical insurance comes with a price tag attached; it’s not free at the point of use like the NHS
• It doesn’t always include everything.  It’s essential to check your premium before going ahead to ensure that it includes all of the care and treatment you want/need it to.
• You’ll need to pay an excess.  Just like your car insurance, if you need to claim on your policy, you’ll probably have to pay an excess.

What does private medical insurance cover?

It depends on your policy, but most private medical insurance policies provide cover for a whole range of eventualities, which are generally categorised as “inpatient” and “outpatient” treatment:

Inpatient treatment – this is the sort of treatment that requires you to take up a hospital bed; either for tests or for surgery

Outpatient treatment – Outpatient treatment is “everything else” really – consultations and appointments that don’t need an overnight stay or a bed.

Within both of these areas, lots of insurers will allow you to specify what you’d like to be covered, for example, physiotherapy, dental, opticians, homecare, or psychiatric.

Whatever the specifics of your situation, make sure you check your policy thoroughly to ensure that it provides the level of care you want it to.

What doesn’t it cover?

Again, it varies from policy to policy, so when you talk to potential insurers, you must clarify what your plan does and doesn’t cover. Still, as a rule of thumb, most insurers don’t offer cover on:

Emergency treatment – A&E departments are run by the NHS, which means that if you need emergency treatment, it won’t be private.  However, once you’re stabilised, you may be able to transfer to private care.

Treatment abroad – UK insurers won’t generally pay for your care overseas, but your travel insurance will – just make sure you read the fine print!

Long term/incurable conditions – generally a treatment for illnesses like HIV and cancer won’t be covered under your medical insurance policy, but some insurers will be able to include them in your plan.

Antenatal care – it is possible to get private antenatal care, but you will need to specify this; it won’t be covered under a general policy

Some elective treatment – if you want fertility treatment or cosmetic surgery, a standard policy is unlikely to cover it.

Drug rehabilitation – treatment for drug abuse is unlikely to be covered under your policy, but if that is an issue, it’s sensible to speak to your insurer to understand where you stand.

What types of policies are there?

There are various options when it comes to private medical insurance policies, both concerning who’s insured, and what they’re protected for.

An individual policy covers you, while a joint plan can take care of you and your partner.

Family premiums are also available, as well as specific ‘child-only’ policies.

In terms of what your cover provides you, a fully comprehensive policy will give you the most extensive selection of treatment, but there’ll also be specific policies or additions to more standard policies that are well worthy of your consideration, including cancer cover, dental care, optician costs and antenatal care.

If you’re over 50, then you can select a policy that’s specific to your age range, covering some of the care you are most likely to need.

Generally, policies come with limits:

• How much you can claim in total
• How much you can claim for each condition
• How much you can claim for specific types of treatment; i.e. inpatient or outpatient

How much does it cost?

It depends.  Many different factors decide precisely how much your premium will cost.  Here’s a selection of what your insurer will take into account:

• How old you are
• How healthy you are
• Whether your family has a history of conditions that require medical attention
• Whether you smoke or are overweight
• What you choose to cover

There are various ways you can try and lower the cost:

• Pay a higher excess – the excess if what you’ll need to pay towards your treatment when you make a claim.  The higher this is, the better your chances of a lower monthly premium.
• Having a “wait period” – this means that your policy only kicks in if the NHS waiting list is longer than your “wait period”.  I.e. if you can get the treatment on the NHS within six weeks, you won’t pay for it, whereas if it’s over six weeks, you’ll get it done privately.
• Use specific hospitals – you may be able to reduce your premium by only being covered at a few hospitals and medical premises.
• Keeping your claims at a minimum – just like car insurance, after a while, you can build up a “no claims” discount.  The insurer sees you as less of a risk and rewards you with a lower premium.

What’s the next step?

If you’re interested in private medical insurance, the next step is to get a rough idea of how much it’ll cost you, what kind of policy you need and understand which insurer could be the right one for you.