Most UK residents have access to free healthcare through the NHS, a service that provides comprehensive medical treatment to anyone, regardless of their ability to pay. However, around 8 million people in the UK pay for private health insurance (also known as private medical insurance or PMI) giving them quick access and more choice when it comes to consultations, scans and treatment, but it comes at a cost.
In this article we consider whether private health insurance is worth it. We look at the pros and cons of taking out private health insurance, explain what private health insurance is and where is best to buy it.
What are the pros and cons of taking out private health insurance?
- Quicker access to consultations, scans, diagnosis and treatment
- Specialist referrals at your request
- You may be able to get access to medication or treatment not available on the NHS
- You may be able to choose a specific surgeon or hospital
- You may be given your own private room
- Cover can be expensive and the cost increases as you get older
- Does not cover chronic conditions such as diabetes, heart disease and high blood pressure
- Existing medical conditions are usually not covered (you could opt to include existing conditions as an 'add-on', although this can be costly)
What does private health insurance cover?
It depends on the type of cover you buy as, like most insurance policies, you are able to include optional extras. Most basic private health insurance policies will cover the cost of in-patient care such as scans, tests and surgery as well as some basic aftercare. More expensive private health insurance plans will extend to offering outpatient care, including access to specialists and consultants and may even pay you a fixed amount for each night you spend in hospital. For more information, check out our article "How to compare the best private health insurance policies".
Is private health insurance good value for money?
This is a tricky one to answer because it really depends on your own circumstances and what value you place on the benefits on offer. Have you ever been to a theme park where you can buy premium tickets that get you to the front of the queue? Private health insurance is similar, as a major advantage is the faster referral process, with many people opting for it purely for this purpose.
Private health insurance can also give you access to medication and treatment that may not be available on the NHS, which, using the theme park analogy means not only are you getting to the front of the queue, there's a chance that you'll get to ride the front and get a free picture on the way out.
The best way to understand whether private health insurance represents good value for money is to look at the list of pros and cons above. Weigh up what you would be prepared to pay for the benefits listed and then get a quote and see how they match up.
What is the best private health insurance policy?
You have likely heard of private health insurance providers such as AXA PPP, Bupa, Aviva and Vitality but it is a competitive market and so you shouldn't automatically dismiss some of the lesser-known providers such as CS Healthcare, WPA and Freedom. Where it becomes tricky is comparing the cover that each insurer provides, as it is not as simple as picking the cheapest plan.
Firstly, you'll need to choose the level of cover and these typically fall into three categories, basic, intermediate and comprehensive cover. As you would expect, each type of cover offers a slightly different level of health insurance, each at a different cost. You will also need to choose the level of excess you are willing to pay; the lower the excess, the higher the premium.
Finally, you will need to opt for either a fully underwritten policy or a moratorium policy, both of which are explained in our article "How to compare the best private health insurance policies". In a nutshell, you either choose to disclose all of your medical information upfront or you can disclose limited medical information, but you may have to provide more at the point of claim.
Where to buy the best private health insurance policy
Comparing private health insurance quotes is tricky as there are so many different types of cover available. There are also optional extras to consider such as dental and mental health cover as well as therapies like physiotherapy and osteopathy. Even comprehensive cancer cover may need to be added to a policy to provide this vital cover. Prices can also vary based on the hospitals you wish to have access to and this will be determined by those closest to you and your personal preferences.
A good place to start is to use a comparison site such as Assured Futures*, as you will be able to see each policy side by side. An even better way is to speak to an independent specialist at Assured Futures*, as they will be able to talk you through the benefits of each plan and provide tailored quotes based on your personal preferences.
Alternatives to buying private health insurance
If you are rarely ill, you could consider 'self-insuring' which is the process of saving the money that you would have spent on private health insurance premiums. Rather than paying an insurance company, you would put the monthly equivalent into a savings account which will build up over time. The idea is that if you are then ill, you can use this money to pay for the treatment yourself.
Get your company to pay
Many companies now offer private medical insurance as an employee benefit. You should speak to your HR manager to see if the option is available and if it isn't, you should ask whether it can be considered in the future. It is possible that you still have to pay a contribution towards the cover as it will likely be considered a taxable benefit, but your HR or accounts department should be able to sort out the necessary forms for you.
Paying for treatment
If you already have savings that you could call upon, then you could just opt to pay for the treatment yourself, rather than paying for private health insurance. Remember that private health care costs can easily run into tens of thousands of pounds. Alternatively, you could opt for a lower level of cover (i.e. basic) that would help pay for the more expensive medical care which your savings are unable to stretch to.
People have mixed opinions about the NHS but the fact remains that the UK is one of the few places in the world that provides people with free access to medical treatment. The NHS is very good at dealing with serious illnesses and offers priority treatment for cancers, strokes and heart disease. Private health insurance provides no improvement over the NHS for these type of illnesses and it is often the same doctors who treat patients in the private medical sector as those who work in the NHS.
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