The most common way to pay for private healthcare treatment is with private medical insurance. Whilst accessing treatment through insurance is relatively simple, there are some important considerations to keep in mind.

Private medical insurance (PMI) is a policy that can give you quick access to private consultations, tests and treatments. “You have that peace of mind that if you do need a procedure or you become ill, that cover is there for you,” says Dr Andrew Vallance-Owen MBE, Chairman of PHIN. 

In the UK, around 2 in 3 patients pay for private treatment through insurance, which you can hold either with a personal individual plan for you (and your family), or as a policy through your employer.

The other alternative is self-pay, which is where you pay the private healthcare provider directly for your treatment and care.

Just like any other insurance policy, private medical insurance comes in all shapes and sizes, with different types of cover levels and prices. Cover can vary depending on the treatments covered, plan limits, types of tests, your contribution towards the cost of treatment (commonly known as an “excess”), and where you are treated.

To access care using private medical insurance, insurers typically want you to have a referral from your GP, though increasingly some plans allow you to refer yourself directly to the insurer. You may also be able to self-refer for treatments and services such as musculoskeletal (joint and muscle issues), for mental health issues, and some types of cancer, so check your policy.

What is covered by private medical insurance?

According to the Association of British Insurers (ABI), private medical insurance usually includes:

  • Hospital admission
  • Diagnostic tests, such as MRI and CT scans
  • Surgery, including the cost of the specialist and anaesthetist
  • The costs of seeing a consultant or therapist
  • Hospital accommodation and nursing care
  • Cancer drugs – some policies will include drugs that are not available on the NHS

Many insurers offer optional extras so you can enhance your cover (and your premium). These extras might include extended limits on core cover for treatments or therapies, for example eight sessions of counselling could become twelve. It could also include dental cover, worldwide cover, or an extended list of hospitals where you can be treated.

The ABI suggests asking your insurer whether there are any monetary limits on your cover per year. Limits could affect how much treatment you can receive and claim for, and whether you can continue it in the NHS, so you’ll need to speak to your insurer about what happens next. For example, the ABI advises “there can be limits on cover for cancer drug treatments. A drug treatment that your insurer has covered might not be available on the NHS when your insurance cover ends.”

What isn’t covered by private medical insurance?

PMI won’t normally cover the treatment of health conditions or complaints you’re suffering from at the time you buy your cover, referred to by insurers as “pre-existing conditions”. Any cover you buy from a private medical insurer won’t usually cover the costs of the ongoing management and maintenance of chronic, or incurable, conditions such as asthma, diabetes, or eczema.

That’s because private medical insurance is designed to treat short-term, curable conditions that are likely to respond quickly to treatment. “[Private medical insurance] doesn't replace the NHS – it's complementary to it,” says healthcare market specialist, Elliott Hurst.

“When you buy an insurance policy, typically speaking, it doesn’t cover every single eventuality under the sun,” Elliott adds. There are a number of treatments and services that won’t normally be offered in your cover:

  • Primary care, e.g. GP appointments and prescription drugs
  • Accident and emergency care
  • Normal pregnancy and childbirth
  • Self-inflicted harm such as alcohol or drug abuse
  • Gender reassignment
  • HIV care
  • Cosmetic treatment
  • Treatment for long-term or chronic illnesses
  • Infertility

If your insurance doesn’t cover a specific treatment or condition, you could choose self-pay instead. And because insurance premiums can generally be higher if you’re older, “people tend to do self-pay because something comes up suddenly that needs fixing,” says Andrew. Self-pay can eliminate committing to a monthly premium and give you the option to pay for treatment as and when you need it. 

Understanding excesses and pre-authorisation

Just like any other insurance product, when you make a claim you’ll sometimes need to pay a contribution towards your treatment, commonly known as an excess. Andrew says: “Most of the excesses offered are in the hundreds of pounds, and like many insurance policies, you can to some extent have some flexibility on excess. There’s no question that if you’re prepared to pay to have quite a large excess your premium will be lower.”

When making a claim on your policy, Elliott’s advice is to “speak to your insurer at each and every stage of the claim and the process.” This is called pre-authorisation and will give you reassurance and peace of mind that your insurance covers the consultant or therapist you want to see, the hospital you are planning to have treatment in, or the tests you need.

Without pre-authorisation, you risk having to pay additional costs towards your treatment if your insurer doesn’t cover it. “[Pre-authorisation means] there should be no shocks and scares when it comes to your insurance policy paying for the cost of your care. This means you can go through your treatment and care concentrating on the most important thing, which is your health,” says Elliott.

Accessing PMI through your employer

You may already have access to private healthcare benefits through your employer, so check to see what you’re entitled to, and if the cover extends to family and dependants. Corporate plans generally look and feel the same as a private health policy you might buy for yourself or your family. However, the larger the number of employees, the likelihood is that pre-existing medical conditions might be covered by the insurance arranged by your employer.

Some large employers may choose to self-finance their employees’ private healthcare benefits via a healthcare trust, and use a third party specialist administrator to manage claims and memberships. “To all intents and purposes, cover provided by your employer via a healthcare trust will look and feel very similar to cover arranged via a private medical insurance plan – but there are some notable and quite nuanced differences between a trust and a contract of insurance,” says Elliott.

He adds that a healthcare trust isn’t a traditional contract of insurance. It doesn’t come with the usual insurance regulation and patient access to the Financial Ombudsman if you’re unhappy with your claim or there’s been a decision to decline to pay for some or all of your claim. “Of course, you could go to the trustees responsible for managing your employer’s trust if you're unhappy with the way your claim has been managed.”

Making a claim is the same as if it was a plan you personally bought. “Generally speaking, that’s going to be really simple and very similar to the way you might pre-authorise care via an insurer.” Elliott also advises to familiarise yourself with the extent of the cover, any overall policy limits, or restrictions in the cover your employer is providing to you.

With private medical insurance, it’s always best to consider what options are not only available to you, but will work best for your personal needs. Before making a claim, check you’re covered by reading your policy documents or by speaking directly to your insurer, and always remember to get any appointments and treatments pre-authorised.

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