With the NHS urging the public only to use its services in a “genuine emergency” (due to strain from rising energy costs as we approach the winter), interest in private healthcare is on the rise. Yet how does it work exactly? What type of insurance might you need, and how much should you pay? In this guide, our Carlisle financial planners at Vesta explain how PHI (private health insurance) can fit into a wider financial plan. We hope this is useful to you and please contact us if you’d like to discuss your own protection strategy with a financial planner.
What is private health insurance?
Sometimes also called private medical insurance (PMI), private health insurance provides funds to help pay for your medical bills if you accept the services of a private provider. Large private hospital groups include BMI Healthcare, Nuffield Hospitals, Ramsay UK Healthcare and Spire Healthcare. Similar to other insurance policies (e.g. life insurance), PMI involves paying a regular premium to the insurance company. The cost and extent of cover depend on many factors like your age, lifestyle and family medical history.
What kind of conditions does PMI cover?
You need to check the fine print carefully when considering different PMI options, as each one will likely cover different conditions. Basic policies will probably cover most in-patient treatments and day-care surgeries. Certain policies cover specific out-patient treatments (e.g. specialists). However, most are unlikely to cover cosmetic surgery injuries caused by dangerous sports and organ transplants. Chronic illnesses are also typically not covered (e.g. HIV/AIDS).
What are the pros and cons of PMI?
The advantage of going to a private hospital is that you are more likely to be attended to quickly. Currently, around 7m people are on NHS waiting lists for consultant-led elective care (the highest level in over 7 years). There is also an unknown “hidden backlog” – e.g. patients who need help but who have not presented – which means the situation is likely worse than figures suggest. A private hospital can, therefore, lead to speedier appointments and faster diagnoses.
Private healthcare also offers the possibility of your choice of doctor and facility. You may even be entitled to your own room for treatment rather than sharing a ward. This could allow your partner/spouse to stay overnight with you. There is also a stronger chance that you gain access to the latest innovations in medication and treatment procedures, which could mean a shorter, more comfortable recovery time.
Of course, the big downside to PMI is the cost involved. Not only do you need to pay monthly premiums for your policy, but you may also need to pay an excess on any claims you make. There is also no guarantee that you will get better, or faster, treatment compared to what the NHS can offer. In fact, often the lack of intensive care facilities in most private hospitals can lead these providers to refer patients to the NHS if their conditions deteriorate.
Do I need private medical insurance?
Your first point of call should be to check your employee benefits. If you already have PMI via your contract, for instance, then your own policy may not be required (unless it does not meet your needs). Another factor to consider is your own health history. Is there a specific condition that you have (or fear that you may develop later) which you may want PMI to cover? Here, be careful to check whether PMI policies would cover it (a financial planner can help you with this). For instance, if you want a policy for normal pregnancy and childbirth costs, then this is unlikely to be found. Pre-existing conditions will also generally not be covered.
However, if you would prefer to not wait long for treatment, use private facilities (instead of a ward) or want the option to access drugs/treatment that may not be available on the NHS, then PMI can be a good idea if you have the financial means.
How do I choose a PMI provider?
Working with a financial planner can help you to integrate any potential PMI into your wider financial protection plan (e.g. life insurance, income protection or critical illness cover). It is key to not “double up” with your policies – possibly leading you to pay more in premiums than is necessary. A financial planner can also help you identify ways to prepare for your application to help keep your potential PMI costs down. Some ideas to consider here might include changing some lifestyle choices (e.g. stopping smoking) and building up some savings so you can raise your excess when making claims. Your financial planner can also help identify needless optional items on different policies so you can reduce costs by excluding them. Finally, another idea is to check to see if you could reduce your out-patient cover.
Invitation
If you would like to discuss your financial plan and retirement strategy, then we would love to hear from you. Get in touch with your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.
Reach us via:
t: 01228 210 137
e: [email protected]
This content is for information purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.