Private medical insurance

Despite paying for their treatment on the National Health Service through their taxes, a significant portion of UK residents opt to pay for private medical insurance, or PMI. Some 7.5m people have private medical cover, often through their employer. The UK spent £4.4bn on PMI in 2005.

Why pay for PMI when we already have the NHS?

Using the NHS is a bit like taking public transport – it gets you from A to B eventually, but the experience is not always stress-free. PMI, like car ownership, provides you with more comfort, speed and privacy.

NHS waiting lists have shortened over the past decade, but you can still bypass the queues for non-emergency operations by going private. Moreover, a stay in a private hospital may be a less unpleasant experience – as well as more luxurious decor, you are likely to be given a private room.

So private treatment beats NHS hands down?

It’s not that simple. NHS hospitals have big specialist teams, with registrars, house officers and specialist nurses led by an experienced consultant. Private hospitals tend to be smaller, and may not offer this strength in depth.

In practice, many doctors who offer private treatment also work in the NHS. Likewise, many patients with PMI still turn to the NHS as their provider of general practitioner and accident and emergency services.

What does PMI cover then?

The main purpose of most policies is to provide cover for the diagnosis and treatment of acute, non-emergency conditions. Classic types of operation covered by PMI include hip replacements and hernias. Patients may also opt for private treatment for more urgent operations such as heart surgery, particularly if there is a waiting list on the NHS. If you choose the NHS instead, some insurers will pay you £50 to £100 for every night you spend in hospital.

What are the main exclusions?

There are plenty, so read the small print. The main exclusions are likely to include emergency treatment, for example after an accident; consultations with your GP; and any pre-existing conditions; as well as chronic conditions where you are unlikely to return to your previous state of health.

Your cover may also exclude services such as homeopathic medicine, dentistry, treatment abroad and treatment relating to pregnancy, fertility, HIV/Aids and injuries resulting from terrorism or criminal activity.

Who are the main providers?

Bupa is one of the best-known names. Another big provider is PPP, part of Axa, the large French insurer. Norwich Union also provides private health insurance, and PruHealth (see below) is a relatively new provider that is rapidly gaining market share.

How much does cover cost?

Monthly premiums vary enormously. But if you are a 40-year-old non-smoker and moderate drinker with no serious health problems, you could expect to pay £60 to £75 a month. A 60-year-old man living in London would pay £80 a month for comprehensive coverage and a £100 voluntary excess, according to Moneysupermarket.com.

Are there any cheaper versions?

If your only concern is to avoid long NHS waiting lists, some policies only provide cover if the treatment you need has an NHS waiting list of at least, say, four weeks. Alternatively, some policies only cover specific cases – PPP, for example, offers a policy that only pays out if you need treatment after a road accident.

What factors affect the cost?

The older you are, the more expensive cover is, and past retirement age you will find it increasingly hard to find any cover. Other factors include location – living near lots of private hospitals pushes up premiums, as you are more likely to want treatment there – and your medical history.

Do I have to disclose my medical history?

Yes – sooner or later. Many policies exclude conditions that you have suffered in the past five years. If you do not want to reveal all when you apply, you can ask for a “moratorium” which means you make more limited disclosures – but you will still have to disclose details if you make a claim, and the claim might be processed more slowly.

Do I pay a lower premium if I live a healthy lifestyle?

Yes, especially if you choose the right provider. A healthy lifestyle should make you less likely to require medical treatment, which means you are cheaper to insure.

PruHealth – a joint venture between Prudential, the insurer, and Discovery Holdings of South Africa – offers a package combining health insurance and gym membership.

How does that work?

You earn points for regular gym visits, stopping smoking or having a flu jab. You are also offered a discount on gym membership fees.

How do I know if an insurer is reputable?

Find out whether the insurer is a member of the General Insurance Standards Council, which has a code of conduct setting out minimum standards.