Private medical insurance: Is it a wealth risk?
Tailoring your cover to meet your needs can significantly cut premiums
Sunday 15 April 2012
Private healthcare caught the unwanted attention of the Office of Fair Trading (OFT) last week with the watchdog referring the industry to the Competition Commission. Concerns have been raised that nationally there aren't enough providers and insurers to ensure healthy competition in the market and that costs aren't always transparent for private patients.
The news could mark a potential victory for consumers. "More often than not the public is not exposed to the actual cost of treatment and that's not a very healthy situation for any consumer," says Neville Koopowitz, the chief executive of the insurer PruHealth.
"Most private medical insurance [PMI] policies have got limits on the various types of procedures and if prices were more transparent consumers could manage their product more effectively so they are not exposed to shortfalls".
The main benefit to holding PMI is that you can jump the NHS queues, but with the best policies you can take your pick of the best hospitals and doctors, and receive treatment at a time and place that suits you. You may even gain access to drugs and treatments not available on the NHS, but PMI is only designed to cover the cost of short-term, curable illnesses or injuries known as "acute conditions". It won't cover pre-existing, long-term illnesses such as diabetes and asthma, but otherwise will pay out for in-patient tests, surgery, hospital accommodation and nursing. You can also include dental, optical and even alternative therapies at an extra cost.
If you go private without insurance you can expect to pay through the nose – a private MRI scan can cost up to £1,000 and a hip replacement up to £10,000 – but if you want comprehensive cover, premiums can also be steep.
We asked the comparison site Activequote.com to look at the best buys available for a 34-year-old male, non-smoker, living in Birmingham. These ranged from £10 a month for a basic policy from WPA up to £50-plus a month for a policy with no limits on outpatient cover from PruHealth.
The main factors that affect premiums are medical inflation (in particular advances in technology for heart and cancer treatment) and age, simply because as we get older we rely more on healthcare.
One problem for insurers is that when times are tough and people are looking to curb their spending, it is often seen as luxury. Mr Koopowitz says: "The problem is that it's the young and healthy who leave first and insurers are left with the older population who are claiming more and using those high-tech treatments more. Put that in the mix, and if more and more people pull out, you're only left with the really ill who won't be able to afford their premiums."
There are still ways you can save money, including making the most of any discount schemes on offer including optional excesses, no-claims discounts and voluntary six-week waits (meaning you only go private if the NHS cannot provide treatment within six weeks) which can reduce premiums dramatically without reducing your cover to a significant degree.
PruHealth offers its Vitality scheme, giving you reward points which can save you money on travel, your mobile phone bill and gym membership, and eventually to cut premiums on the proviso that you have regular health screens, eat healthily and keep fit.
You can find quotes on the usual comparison websites such as Moneysupermarket.com and Comparethemarket.com, or go through specialist brokers such as PMI Partners and ActiveQuote.com.
The devil, as always, is in the detail so check the limits that apply to each type of benefit when you're comparing policies. For example, there may be a limit on the amount the insurer will pay for a single condition or how long it will continue to cover it.
Cancer cover is one feature that will vary considerably from one insurer to another, with some offering full cancer cover and others limiting the length of time for which you can claim. You may be able to tailor the policy so that you are only covered for surgery or advanced cancer drugs.
Mark Didehvar, a 35-year-old, self- employed IT consultant, is typical of those who have taken up PMI.
"I think the NHS is great if you have a medical emergency, but sorting out less serious issues through the NHS can take a long time as you are subject to lengthy waiting periods for tests and results," Mr Didehvar says. "Being self-employed, I need to fix any medical issues as quick as possible in order to minimise time off work and get back to full health as quickly as possible."
Although he pays a fairly hefty £117 a month with Pruhealth, this includes cover for his wife and three sons, full cancer cover and no excess to pay.
Most PMI policies are modular, meaning you can start with the most comprehensive policy and then deselect elements of cover to cut the premium according to your budget.
Get to grips with how good the NHS is in your area and then base your priorities on this. So, if you have short NHS waiting lists you could save money on this, and if your main concern is in-patient cover – for lengthy stays in hospital – make sure you have comprehensive cover for this. You can also restrict your hospital choices to ensure that you don't pay for hospitals you will never use.
Never take shortcuts with your medical history, though, and always declare pre-existing conditions.
Shared responsibility or co-payment policies are another way to slash your premiums. With these you share the cost of treatment with the insurer: typically you pay 25 per cent and the insurer 75 per cent, subject to an agreed annual limit. Once the limit is reached the insurer will cover further costs.
Another option is a healthcare cash plan. With these you pay a monthly premium and can claim cash back on NHS or private treatment, up to an annual maximum limit.
Crowd-to-let: How crowdfunding sites can give investors a slice of the property market for £500
General Election 2015: How you vote next week could affect your finances
Dirty tricks in a divorce can cause some nasty surprises
Social tenants locked into energy tariff for 40 years
Have you won £1m in the May Premium Bonds draw?
- 1 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 How to gain confidence and maximise your sexual potential
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...
Day In a Page
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings