Whether you’re a business owner looking to keep employee downtime to a minimum or you’re an individual hoping to boost your medical care options, private health insurance can seem like a wise investment. Recent research shows that the number of adults paying for private health insurance leapt from about 12% in 2019 to 22% by the end of 2022.
That said, there are many misconceptions about how private health insurance works. To help you understand whether private medical insurance is right for you, we cover six important facts you need to know about private health insurance.
- Private health insurance doesn’t replace NHS treatment
- You can widen the scope of your cover
- Private insurers are offering more than before
- Private health cover is good for business
- Premiums increase over time
- Switching providers isn’t always a good thing
Private health insurance isn’t meant to be a complete replacement for the services provided by the NHS. Indeed, private medical insurance in the UK is valuable because it complements NHS treatment. PMI is also there to cover acute medical conditions and generally doesn’t cover any pre-existing conditions. The exception is some group arrangements with special underwritten terms, which include cover for such conditions.
If you’ve got a health problem, you’ll normally start by seeing your NHS GP. The GP will refer you if you need a specialist consultation or treatment. You can then activate your private health insurance policy by contacting your insurer and asking them to approve the referral, or you can choose to have the referral through the NHS.
For example, imagine you’re drinking much more water than normal and don’t feel well. You visit your GP, but they’re unable to diagnose the problem and refer you to a specialist. You’re informed there’s a long wait to see a specialist through the NHS, so you ask your insurer to authorise a private healthcare referral. You then see an insurer-approved specialist of your choice within days, and they diagnose you with diabetes and agree on a treatment plan. The ongoing treatment of diabetes wouldn’t be covered by PMI, but the initial evaluation and diagnosis is. You’re then referred to the care of your GP for monitoring.
If you later get an acute issue related to diabetes, such as poor circulation in your feet, you can activate the policy again and see a private specialist.
While most referrals come from GPs, some policies allow referrals from other healthcare professionals, such as chiropractors, psychologists, and osteopaths. If you have symptoms of certain conditions such as cancer, mental health issues, or musculoskeletal problems, you may be able to contact your insurer direct without seeing a GP first to get a referral. You’ll need to check your policy wording to see the referral procedures.
The three main aspects of private health insurance policies are:
- In-patient cover. You’re in a hospital bed overnight.
- Day-patient cover. You’re admitted to the hospital, have a procedure and recovery bed, and leave later that day.
- Out-patient cover. You see a consultant and have diagnostic tests, including some Outpatient procedures by Consultants and Specialists.
However, you can add other extras to your health insurance. These include dental, optical, and mental health treatment, plus therapies such as physiotherapy. Some policies will also cover you when travelling abroad, so while travel insurance will exclude pre-existing conditions, these would be covered under private medical insurance.
Some policies will cover cancer care as standard, while others will provide cover if you upgrade your policy. Some policies will also give you access to drugs and treatments unavailable on the NHS and, sometimes, pioneering treatments.
In recent years, insurance providers have been working hard to introduce new technologies and enhance key areas of care to make their services as quick, convenient, and appropriate as possible for policyholders. For example, many policies now offer a virtual GP facility as standard, so you don’t have to wait for an appointment with your NHS GP.
Some insurers provide an easy pathway for certain treatments and conditions, such as mental health, cancer, or anything musculoskeletal, without requiring a GP referral. Others provide incentives and rewards for a healthy lifestyle as it possibly reduces the chance of claims being made.
While individuals value private health insurance for many reasons, from cutting waiting times to being assured of a private room in a hospital with en-suite facilities, many businesses also see the value of providing this insurance for their employees.
Business owners often take out group medical insurance for their employees so they can get back to work as quickly as possible should injury or illness strike. If a company owner, director, or key person is away from the business for any length of time due to ill health, it could have a detrimental impact on the business. Private medical insurance can facilitate a return to work as quickly as possible.
If you own a business or are self-employed, it’s worth remembering that while medical insurance will pay for your treatment, it won’t replace lost income while you’re ill. So income protection can cover monthly living expenses while you cannot work.
While car insurance premiums tend to decrease over time (provided you don’t make any claims), private medical insurance premiums will increase. As we age, we’ll likely need treatment for acute conditions such as joint replacements, which increases the risk to your insurer.
That said, other factors will affect your premium. If you have never claimed, your premiums will be lower than if you had. Medical inflation – the costs associated with providing state-of-the-art new treatments and drugs – also increases prices. You’ll also have to pay Insurance Premium Tax, which is currently 12%.
However, there are ways of decreasing your premiums. For example, if you’ve made lifestyle changes, such as losing weight or stopping smoking, your insurer may offer you a lower premium. If you opt for a higher health insurance excess, you should also be able to reduce your premium.
When it comes to group medical insurance for businesses, premiums cost much less per individual as you’re purchasing more policies at a time. This makes company health insurance excellent value if your business is looking at offering employee benefits, as well as something that can improve the bottom line thanks to increased productivity and reduced sick leave.
For many types of insurance, we’re often encouraged to shop around at renewal time. However, with private medical cover, this isn’t always a good idea.
This is because new policies that include a pre-existing conditions moratorium typically have lower premiums. However, if you have sought advice from your GP while under your current policy, this will be considered a pre-existing condition by any future insurance provider, which could result in a higher premium being offered.
How to find private health insurance
As with any insurance product, the aim is to find a policy that offers everything you need at a price you’re happy with. It’s important, therefore, to approach a few different insurance providers to see what they can offer you. As an expert broker, we can search the market for you to find a suitable policy.
At Alan Boswell Group, we take the hassle out of arranging private health insurance by contacting multiple providers and finding cover tailored to your specific requirements. If you are considering private health insurance for you or your employees, get in touch with one of our specialists at 01603 967955 or click here.