Private health insurance is a type of policy that covers the cost of medical treatment. In the UK, around four million people have private health insurance cover. But why do so many of us have these policies when we have the NHS?
A disadvantage of using the NHS is the long wait for diagnostics and medical treatment. Also, some cancer treatments are not currently available on the NHS.
Private health insurance policies will cover you for ‘acute’ conditions like hip replacements. There are many providers on the market these days, and they offer varying levels of cover.
Why do you need private health insurance in the UK?
It is important to note that private health insurance complements the services of the NHS. It doesn’t replace it. There will be times where you can only use NHS services, such as the A&E department at hospitals.
The main reason more of us opt for private health insurance is timely access to healthcare. If you get diagnosed with a condition after your policy begins, you’re covered for treatment.
Policies cover conditions like diseases, illnesses or injuries that respond quickly to treatment. They’re known as ‘acute’ conditions, but insurers usually don’t cover ‘chronic’ ones. A chronic condition is an illness that needs long-term monitoring or control, or has no cure.
As a policyholder of private health insurance, you can expect the following:
- Quick referral to a consultant;
- Prompt admission to a private hospital, with treatment at a convenient date and time;
- Dedicated care by a consultant;
- Extra treatment options seldom offered on the NHS.
As you can appreciate, having treatment for a medical condition or injury can be a stressful time.
Many people become even more anxious when they get placed in an open ward with little to no privacy. In some NHS hospitals, you may be given a bed in a mixed-gender ward.
A selling point of private healthcare is that you get a private, en-suite room rather than a bed on a ward. You can enjoy high-quality, clean, and comfortable accommodation with home amenities like TV.
It can make sense to have private healthcare cover for many more reasons too.
What types of private health insurance policies are available?
There are two main types of policy available to take out: individual and group.
Individual private health insurance
As the name suggests, individual policies provide cover for one person only. When you apply for an individual policy, there will be some information you need to tell the insurer. As with any insurance policy, it is crucial that you answer all questions in full and truthfully.
Don’t worry, though, because they only ask for information relevant to the cover you are taking out. When it comes to taking out an individual policy, there are two ways they underwrite policies. They are as follows:
Full medical underwriting
A full medical policy is where you have to provide details of your medical history. Of course, they have to ask for your consent first before they do so. Once you give permission, they may contact your GP asking for details of your medical history. But, it’s not something they do in all applications.
During that stage of the application process, you must disclose all details asked of you. The problem with not giving them full details is they may refuse to pay out in the event of a claim.
Also, it is worth noting that insurers don’t usually cover existing medical conditions. Nor will they cover anything that is likely to come back.
Some insurance companies may opt to exclude minor conditions once they have seen your medical history.
A few insurance providers may offer what’s known as an individual moratorium policy. In a nutshell, this is where you don’t need to disclose your medical history to the insurer when you apply.
When you need to claim, the insurance company may ask for medical notes to decide if your claim will go through. That’s because they won’t cover the following:
- Treatment for any medical condition that predates your policy; or
- Symptoms that you had before the policy was taken out.
If you are considering taking out a moratorium type of policy, you will need to check the terms with your insurer. That’s because the way it works differs between insurance companies.
Have you had treatment or medicine for a medical condition in the past five years? If so, it is worth noting that moratorium underwriting will exclude those conditions from your policy.
All is not lost, though. Most insurers use what’s known as a two-year rolling moratorium. What that means is once you’ve had the policy for two years, you are then eligible to claim for those conditions.
Group private health insurance
Aside from individual policies, it’s also possible to take out a group one. They get offered by employers, and work a little differently to individual ones.
For example, group schemes don’t usually need employees to disclose their medical history. Basic group policies may only cover a limited amount of treatments. If that is the case with what your employer’s policy offer, you could pay for extra cover.
With some group or corporate health insurance, you may find they offer an extensive scheme covering a wider array of conditions and treatments.
It makes sense to check with your employer what cover is available to you. That’s because you might find that it is already offered to you as an employee benefit.
Which underwriting method is best for you?
The short answer is, it depends!
Let’s say that you have had a minor medical condition in the past five years. A private health insurance provider may decide to include it on a full medical underwriting policy. But, they may opt for the opposite on a moratorium one.
Whichever underwriting method you choose, you must make certain it is the right one for you. Most people with an exemplary medical history will opt for a full medical underwriting policy. But, those with pre-existing conditions may choose a moratorium one instead.
Are there any general exclusions in health insurance policies?
When seeking out the best private health insurance in the UK, you must be mindful of any exclusions. Pre-existing conditions are usually the main exclusion on most policies. But, are there any other general exclusions you should be aware of before making a decision?
In short, the answer is yes. Did you know that even the best private health insurance will have some exclusions? Here is a list of the most common ones you are likely to find:
- Blanket exclusions: These are issues related to substance abuse (drugs), alcohol abuse, and self-inflicted injuries;
- Chronic conditions: Put simply, they are conditions which have no cure, and where you will need ongoing treatment. Diabetes is one such chronic condition;
- Pregnancies: Insurers will not cover health conditions related to pregnancies such as aches and morning sickness. Policies will also not cover childbirth in private hospitals. But, some may cover complications such as Caesarean sections, gestational diabetes, and miscarriage;
- Cosmetic surgery: In general, cosmetic surgery is not covered by health insurance providers. There are some cases where procedures may be covered. An example might be rhinoplasty (nose surgery) if you have trouble breathing.
Another common exclusion is emergency hospital treatment. If you have an accident, or you have a medical emergency, you have to use an NHS hospital.
The reason for that is simple: most private hospitals don’t have the facilities to cater for emergencies. Thus, if you needed urgent treatment, you would go to your local hospital’s A&E department for help.
What happens if you have a medical emergency, but the NHS hospital puts you on a waiting list for surgery? In those circumstances, they might deem your medical condition as non-urgent.
Example: you get admitted to your local NHS hospital complaining of abdominal pains. The doctors there have said you have gallstones, and you need surgery to remove your gallbladder. Because it’s not an emergency, you get put on a waiting list and sent home with painkillers.
In such a situation, you can ask to get referred to a private hospital and booked in for surgery. Most, if not all private healthcare policies will cover laparoscopic cholecystectomy (gallbladder removal).
If you have trouble getting referred by the NHS hospital or your GP, it is possible to self-refer in those cases. That way, you can get your surgery carried out in days rather than weeks or months. Plus, you won’t have to suffer with the pain for such a long time.
What is the best private health insurance?
It’s no secret that there are plenty of companies out there offering private health cover. With that in mind, how do you know which ones offer the best private health insurance?
To seek out the best cover for your needs, you need to compare several factors. They are as follows:
The insurance provider
What is the reputation like for each company you are comparing? Thanks to the Web, it is possible to read reviews and ratings online. You can also determine from existing and former customers what each provider is like.
Aside from reputation and reviews, there is another point you must check: the claims process. It is likely that, at some point in your life, you will need to make a claim. The last thing anyone wants to do is pay money to an insurer that never approves their claims. Especially in cases where you get diagnosed with a serious or life-threatening condition!
Level of inpatient cover
Inpatient refers to when you get admitted to hospital and must stay overnight. That usually occurs if you need to have surgery, or must get kept in for observation after it.
In some cases, you may only need to get seen on a day-patient basis. That is where a minor procedure gets carried out and you can go home the same day.
Level of outpatient cover
Outpatient refers to things where a hospital bed is not required. Examples include consultations, tests, certain treatments, and scans. Before you can get seen on an outpatient basis, your GP would need to refer you to the private hospital.
In some cases, getting seen on an outpatient basis may then lead you to having inpatient treatment. A typical example of such treatment is where surgery is required.
The method of policy underwriting
As mentioned earlier, there are two different underwriting methods used by health insurers. Virtually all providers offer full medical underwriting, while some may also offer moratorium. Each insurer should make it clear from the outset what type of underwriting they offer.
It is always worth comparing what extra benefits each provider offers. Examples of such benefits include physiotherapy, mental health, and dental treatment.
Again, check what each insurance company offers. Doing so could mean paying less for your health insurance while enjoying more benefits.
Which providers offer the best cover for private health insurance?
In the UK, we are lucky in that we have a state-funded healthcare system. The concept of the NHS is great, but the reality is that it is an over-stretched system. As a result, it can often be frustrating trying to get treated for a medical condition.
The benefit of having private health insurance is that it offers peace of mind. If you need to get referred to a consultant, or need surgery, it’s quicker to have that done privately.
Health insurance is also useful to have if you are self-employed and need to get treated fast. After all; you don’t get any sick or holiday pay when you work for yourself!
With a private health insurance policy, you have the reassurance that you can get treated soon. Plus, you can choose a hospital that is convenient to your location.
As you can appreciate, there are many insurance companies on the market these days. They all offer different benefits, and have differing terms and conditions. With that in mind, which providers are the best ones to compare?
Here are a selection of some of the best private health insurance providers in the UK:
The largest insurance company in the UK, Aviva is a popular choice for health cover. They offer full and moratorium underwriting. Plus, they also provide continued personal medical exclusions underwriting.
Aviva’s excess levels start from £100 and can be risen through to £5,000 per year. The main benefits of their cover include inpatient, day-patient and cancer cover. When it comes to outpatient cover, this can be set as low as £0, reduced, or can include full coverage.
AXA PPP Healthcare
A trusted provider, AXA has helped people to get private healthcare cover for almost 80 years. They are an insurer that can offer both full and moratorium underwriting.
AXA’s excess fees start from a low £100, and can go as high as £5,000 if required. At the heart of their cover is inpatient, day-patient, and radio/chemotherapy. They also offer optional mental health cover.
For outpatient cover, they offer either standard or full coverage.
A well-known provider of private health insurance, Bupa is an established household name. At present, they offer two levels of cover, both of which include mental health cover as standard. You can choose from full or moratorium underwriting.
The Comprehensive level offers full inpatient and outpatient care. Meanwhile, the Treatment and Care level only provides inpatient. You can set your excess from zero through to £500.
When it comes to outpatient cover, they offer full coverage or with limits of £500 to £1,000.
Exeter Family Friendly
The Exeter is a “mutual friendly society” and has been around since 1927. Their health insurance product is known as “Health+” and comes with mental health cover as standard.
You can opt for full medical or moratorium underwriting. There is also a rolling moratorium option, and they also have continued personal medical exclusions.
Excess levels vary from £0 through to £5,000, and their main coverage is inpatient and cancer cover. You can choose full outpatient cover or one with optional limits up to £1,000.
Last, but not least, there is VitalityHealth. They are a leading global insurer, and is owned by Discovery Holdings. Vitality in the UK was formerly known as PruHealth and PruProtect.
They offer full medical, moratorium, and continued personal medical exclusions underwriting. Their excess is selectable at £0 through to £1,000, and that is once per year or per claim.
Their main benefits are full inpatient, day-patient and cancer coverage. Plus, they reward healthy living with reduced premiums. Outpatient cover can be paid in full, or with limits up to £1,500.
What is the best way to set up private health insurance?
When you decide to set up your private health insurance policy, there are two ways of doing so. You can either go direct to the insurance company, or you can use a third party broker.
There are pros and cons to both ways, and so it will depend on which you feel most comfortable selecting:
Setting up your policy direct with the insurer
If you decide to set up your private health insurance policy direct, there are some things you need to know. First of all, it is known as a ‘non-advised sale.’
What that means is you have taken it upon yourself to decide that the policy is for you. Because of that fact, you don’t have any financial protection if the policy isn’t suitable. In other words, you made the decision yourself, so the responsibility lies with you.
Setting up your policy through a third party broker
Do you feel unsure about selecting a private health insurance policy alone? If so, one thing you could do is look at setting up a policy using a broker.
Sometimes known as an ‘intermediary’ their job is to advise you which policy best meets your needs. Before they can do that, they must have a full understanding of your past and present circumstances. That includes having full knowledge of your medical history.
Once they find a policy from an insurer that is a good fit for your requirements, you can decide to accept it or not. If you go ahead with a broker-recommended policy, the responsibility lies with them.
So, if it turns out that the policy was not suitable after all, they are responsible for sorting things out for you
What happens when you need to make a claim?
At some point, there will come a time where you need to make a claim on your private health insurance. How do you submit a claim? And what happens during the process?
The claim process often begins with a GP referral. If your doctor confirms you need to get referred for tests or to see a consultant, you need to make a claim. You can do that by contacting your private health insurance provider.
When you set up a new policy with an insurer, they will send you some literature on the claims process. Part of that documentation will include their contact details. Some insurers will let you claim online via their website, while others prefer you to post them a signed form.
Once your insurance company receives your claim, they will check your policy details. They need to do that so they can confirm that you have sufficient cover under the policy.
If you opted for full medical underwriting, your claim should get approved quickly. That’s because they have all the information they need on your medical history.
The only time there is likely going to be a delay is if you opted for moratorium underwriting. Your insurer may have to request information from your GP before approving the claim.
While you wait for the claim to get approved, you should not book any appointments or have any treatment. If you do, your insurance company may not reimburse your costs if the claim gets denied.
Paying out the claim
Once you have confirmation that the claim has gone through, what happens next? When a claim gets approved, the insurer will pay the private hospital or practice direct.
All you need to do is arrive for your scheduled appointment and provide your cover details. Your private health insurance provider will have given you an ‘approval number’ to give to the hospital.
With some policies there might be an excess to pay. An excess is the part of the claim you agree to pay yourself. It works in much the same way as with car insurance, for example.
Your insurer will tell you when you need to pay the excess, and who it must get paid to. In some cases, you may need to pay the private hospital direct.
Once those formalities get completed, you are then ready to commence your treatment.
Can you change health insurance providers?
The simple answer is yes. You are not tied to the private health insurance company you originally took out a policy with. But, there are some things you should consider if you do want to switch providers.
First of all, it makes sense to change providers only when your existing policy reaches its renewal date. If you decide to switch before then, you might get charged a fee from your insurer for switching.
As with a new policy, you should take the time to compare the benefits and terms of alternative policies. That way, you will get the right cover for your needs. Again, you can decide to compare providers yourself or use a broker.
Last, but not least, it’s worth remembering that a new insurer may not cover pre-existing conditions. That includes ones your existing insurance company already covers.
How can you cut the cost of the best private health insurance?
As with all types of insurance, there are a few ways you can keep the cost down with private health cover. They are as follows:
- Offer to pay a large excess: If you can afford to do so, it might make sense to increase your policy excess. Some people keep the excess needed in a savings account so they don’t have to worry about how to pay for the excess when it is needed;
- Minimise your outpatient cover: One of the reasons why your premiums may be high will be down to your outpatient cover. If you want to keep your insurance costs down, you could lower your outpatient cover. Some people even decide to have no cover at all in that respect;
- Offer to have a reduced hospital list: Believe it or not, but telling the insurer to reduce your hospital list can save you money as well. Be sure not to lower your choices to such an extent where you have to travel for hours to your nearest hospital;
- Consider a six-week option: Some insurance companies offer customers the choice to wait six weeks for treatment. If you can get treated under the NHS within that time, you can’t continue with your private health insurance claim;
- Select an insurer that offers no-claims discounts: A few private health insurance companies will award you a discount for each year you don’t submit a claim. As an alternative to discount, they might have a ‘cashback’ system in place, where you get a cheque for a fixed amount sent to you in the post.
Jody is the Managing Director and founder of My Key Finance Ltd. He has over 16 years experience as a protection adviser and is an authority within the UK business protection market. Jody has written articles for Business Matters Business Directory, and been featured in Forbes. As editor and Author of our blog Jody is hoping to educate and advise people with more in depth details and information on the various subject relating to the protection market.