PMI covers most medical costs
It does make you wonder what's happening, when you learn that more and more UK doctors are taking out private medical insurance (PMI) for themselves rather than relying on the NHS. Do they know something we don't? Is it really that necessary? With all the controversy about cleanliness and long waiting lists in NHS hospitals, should we be thinking about getting private medical insurance for ourselves? Here's some information to help you decide. What is private medical insurance?
PMI helps to cover the costs for private medical care if you'd rather not wait for treatment on the NHS. It normally lasts for a year and if and when you need treatment, provided the problem is covered, the policy pays out. PMI allows you to avoid the waiting lists and get your treatment fast. You can often choose when and where you are treated and you’ll have the comfort and privacy of your own furnished room and probably much tastier food!
We've all read about people having to wait months for referral to a specialist or surgery and for some people the thought of having to wait so long for treatment is enough to convince them to go private. Remember that PMI is not a replacement for the NHS. Accident and emergency services for example, are still dealt with by the NHS alone.
What you need to know You can buy insurance from an insurance company, independent advisors or an insurance agent. The insurance company receives your completed application form and will then send you a policy and documents. Make sure you check all the details and if you aren’t sure about the policy there will be a cancellation period. Policies are divided into three categories: - Premier policies: which offer additional benefits such as travel insurance and critical illness cover.
- Comprehensive policies: which provide unlimited cover for out-patient consultations and tests.
- Budget policies: which either exclude/severely restrict coverage for all/most out-patient consultations and tests, or, provide comprehensive cover only if treatment is not available from the NHS within 6 weeks.
You will usually need to fill out a medical history declaration and provide the insurers with your full medical history. They may contact your GP for further information. IMPORTANT: Make sure you give all the information you’re asked for because an insurer could refuse to pay out for a claim in the future if you don’t. Any pre-existing conditions will not be covered by the policy should they arise again, no matter how long ago you set up the policy, and you will have to pay the costs yourself.
Some insurers offer a moratorium policy, which sounds a bit complicated but basically means that you don’t have to provide a full medical history, just some basic information about you and any members of your family you wish to insure. Here are some things to know about moratorium policies: - Pre-existing medical conditions and conditions related to them will become eligible for cover after a particular period of time (usually five years) during which you must not have had treatment, symptoms, medication, tests or advice for that condition (or a related one).
- If you are generally fit and well and any pre-existing conditions were a long time ago then this could be a good option.
- Make sure you’re absolutely clear about the moratorium conditions and do NOT think that you can just avoid getting medical help for the first two years of your policy for a recurring illness because this is not only very dangerous but also pointless because these policies would not pay if you “ought reasonably” to have sought treatment or advice.
What does it cover?
PMI is designed to cover the costs of private medical treatment for what are called “acute” conditions. Insurers define these as illnesses, diseases or injuries that can respond to treatment quickly. With Bupa, like many other health insurers, customers can reduce the cost of their policy by choosing from one of five levels of cover. Although there may be a cap on the amount you can claim in each category, it will usually cover the cost of: - In-patient treatment
- The fees of private medical staff for both diagnosis and treatment
- Operating expenses, including surgeons', anaesthetists' and operating theatre fees
- Accommodation and nursing charges
- X-rays, dressings and medication while an inpatient.
- Outpatient treatment that’s linked to your inpatient treatment
What doesn't it cover?
Don’t forget PMI is like any other insurance – you find out what you're not covered for when you claim. Most policies exclude all past medical problems, known as ‘pre-existing conditions’ and no policy will cover all your medical needs. The following are almost certain to be excluded: - Routine check-ups from a GP, dentist or optician
- A&E treatment
- An illness you developed shortly before taking out the policy
- Incurable or chronic conditions, including the terminal stages of cancer
- Long-term illnesses such as asthma, diabetes and multiple sclerosis
- Normal pregnancy and childbirth
- Cosmetic surgery
How much will it cost?
What you pay for depends on your age, sex, health, and where you live. The more comprehensive the cover offered by a policy, the higher the premiums so you will need to shop around to find the best cover for you. Policies have different charging levels and different breadths of cover. The policy details are very important. For example, as a single person you can pay as little as £13 a month with one plan or up to £249 a month for a more comprehensive one.
Your PMI premiums will also rise over time. This is because as your age increases so does the likeliness that you will need to claim and also the fact that new treatments, drugs, technology may become available and will add to costs. Medical inflation (the cost of buying treatment in the private market) also runs above the rate of normal inflation.
One of the biggest costs can be hospital accommodation. Most insurance providers offer different options that put hospitals into grades A-C with the higher grade costing more. So a band A premium will pay for the most expensive private hospitals and a band C premium will pay for medium-priced private hospitals. Make sure you consider the distance and reputation of hospitals offered by the insurance company before you make a decision.
If you are prepared to pay a higher premium, you can get a policy that also provides cover for cash payments if you stay in hospital as an NHS patient, outpatient tests and treatment not linked to an inpatient stay, and emergency medical treatment when travelling abroad. Most insurance companies say you can choose where you want to be treated anywhere in the world, with travel costs included, at a price. Surprise, surprise, though, with PMI you get the cover you pay for, so those kinds of extras will add handsomely to your premiums.
It may be worthwhile going through a registered PMI broker who should be familiar with a wide range of policies and can recommend one to meet your needs. A broker earns money through commission from insurers so if you do use one ask for several policies so that you can compare costs, benefits and how much commission the broker gets from it! Why not start by comparing quotes from our PMI comparison service? Ways to save
Try to get a rough idea of what you can afford each month and seek to tailor the choice to your budget: - There may be a discount if you can pay the whole annual premium in one go.
- Choose a policy with a no claims discounts, but be warned: lower premiums for no claims may rise sharply if you do claim!
- If you agree to pay an excess in an insurance policy you will be offered lower premiums. An excess is an amount the subscriber pays themselves towards any claim, for example you could agree to pay the first £500, which may work out cheaper in the long run.
- Check to see if your employer offers PMI for you or your family as a perk –it’s still taxable benefit but it’s a lot cheaper than buying a policy yourself.
- See our independent comparison service for PMI quotes.
- Prudential's PruHealth policy rewards someone with a healthy lifestyle with credits for going to the gym, having health checks or giving up smoking, which help to reduce their premiums later. It can work out cheaper than taking out gym membership alone.
How to make a claim
To claim on a PMI policy you must get a referral from your GP for further investigation and treatment. At this point you need to check with your insurer that your particular illness is covered by your policy and if it is you will need to get a claim form. This form will be filled in and signed by both you and your GP and from this your insurer will tell you how much of the treatment costs they will provide. Some insurers will settle the bill directly with hospitals and others will let you pay first then claim back.
If you have any problems with your cover contact your insurance company first who will have a complaints procedure set up. If you aren’t happy with the way they deal with your complaint you can contact the Financial Ombudsman Services who will tell you how to take things further. Other options - Stick with the NHS: you're paying for it anyway through national insurance and private hospitals may not be able to provide you with the range of expertise that you can get with NHS
- Critical illness insurance: this will pay out a lump sum if you're diagnosed with a serious illness.
- Self-payment: you could simply pay for treatment as and when you need it. These one-off costs will be expensive but you could consider putting money aside into a high interest savings account or a cash ISA where you can put up to £3,600 tax-free in a financial year.
Useful links
|
Print this page
