What is private medical insurance?
Private medical insurance is a specific type of insurance covering surgical and medical expenses for an individual, or anyone covered under the specific plan. It covers expenses incurred by the insured persons and is paid to the care provider, or directly to the person to reimburse any costs incurred.
You are not covered for everything and it varies from provider to provider and from plan to plan. Medical insurance generally covers short-term conditions that can be remedied quickly by treatment, surgery and medical tests.
When using specific terminology you would refer to the ‘insured’ as the ‘owner’ of any health insurance coverage that has been taken out. You would refer to the clinic, doctor, laboratory or pharmacy as the ‘provider’.
Is private health insurance popular in the UK?
- Out of 26.7m households in the UK, 1.9 million households are covered.
- 5.1m people in the UK have private health insurance with £7.4m paid out in claims every day.
- £206m was paid out in 2013 in emergency medical treatment, equivalent to £4m a week.
11% of the UK population have some level of private medical insurance, according to the “Kings Fund Private Health Care Market Report 2014”;
What is covered?
The type of plans that are available vary significantly, from low-cost and affordable plans all the way up to zero-deductible full coverage plans. Even though the plans can vary significantly there are many elements that are standard in all plans:
- Exclusive drugs – If your treatment needs drugs that are unavailable on the NHS, but have been approved by National Institute for Health and Care Excellence. then they could be covered.
- Hospital stay and specific nursing care – In most policies you can expect your stay in hospital to be covered, along with any nursing care that is needed during your visit.
- Inpatient care – Inpatient treatment is when you need a hospital bed for the day, or overnight. This will also include tests and surgery.
- Outpatient care – Outpatient care is when you do not need to spend a night at the hospital, or will not need a hospital bed. In this case you might only being seeing a consultant, or having diagnostics. If you have a cheaper policy then the amount of outpatient care available in your plan could be capped. Under cheaper policies the type of outpatient procedures available could also be limited.
- Extra cover – Depending on the insurer, cover for psychiatric treatment varies. It is difficult for providers as it is not always clear whether it falls under illnesses that are curable (which is short-term and therefore covered) or if it is long-term care (which is not covered). Depending on the type of comprehensive cover (or premium cover) you take out you might have psychiatric treatment covered.
- Some policies also offer:
- Private ambulances
- Nursing home care
- 24-hour help line
- Complementary therapies
- Private hotel rooms
- Accommodation of a relative or child is in hospital.
You will not find these premium services covered under cheaper plans, but when as you look at higher cost premium plans you will find more of these options covered.
What is excluded from private health insurance?
Health insurance generally covers curable (short-term) procedures and does not cover ongoing (long-term) procedures such as asthma, kidney dialysis, non-essential cosmetic surgery and drug abuse.
What is Private Diagnostic Insurance?
It might seem like a cheaper alternative to health insurance but it is not. Private diagnostic insurance only covers the ‘diagnostic’, or in other words it will pay to find out what is wrong with you, and nothing further. After this you will still have to pay for the cost of any necessary treatment.
Why would I need individual insurance if my company provides it as a benefit?
Private health insurance can help to ‘top-up’ the difference between what your corporate insurance provides, and what you might personally need. Through a corporate health insurance plan you may not be covered, for everything that is important to you. Taking a close look at what your company provides will allow you to make sure you are covered for what counts. You can top-up your corporate plan to include:
- Dental insurance
- Maternity Insurance
- Optical Insurance
- Extreme sports (skydiving, bungee jumping)
- Global travel insurance
I have NHS coverage – why would I need private coverage?
The NHS has certain guidelines about what is covered, how long it takes to be seen, and the types of facilities available for treatment. Having private health insurance means that you can cover the gaps between what is needed in your personal situation, and what the NHS offers.
Can I still use the NHS if I have other insurance?
Yes certainly. Sometimes the NHS has the best option and your provider will recommend that at no extra cost. Private health insurance generally goes above and beyond what the NHS can offer.
What are the different types coverage?
Health insurance generally falls in to two main categories.
- Fully underwritten insurance – insurers ask for a full medical history.
- Moratorium insurance – limited information about medical history.
A fully underwritten policy will generally give you wider coverage, but to cover this wider coverage you will pay more. A moratorium policy will be cheaper but will come with complete, or ‘blanket’ exclusions on many pre-existing conditions.
On top of these two categories, many provider are now offering mix and match policies to make sure the policy is tailored to what you or your family insurance needs. On top of inpatient care these modular policies help you save money in places that you don’t need coverage, and help bolster coverage where you do.
Depending on what provider you go with some offer specialist policies. These can cover specific possibilities, for example:
- Specifically over a certain age bracket (e.g. 55 and above, or over-65s)
- If the waiting list for the specific treatment on the NHS is longer than 4-6 weeks.
- A specific focus on one ailment or disease, e.g. leukemia.
Are there other options available?
The NHS offers many free treatment options, but if they don’t cover everything you need you can look at critical illness cover, where specific illnesses are covered, or healthcare cashplans where you pay a monthly stipend and can be reimbursed for a number of basic treatments.