Why the right cover could be good for your health
THE NHS typically hits the headlines for all the wrong reasons at this time of year, as colder weather and flu epidemics place an added burden on hard-pressed GP surgeries and hospitals.
It will feature even more prominently this year, with an election just weeks away and the British Medical Association predicting that “the NHS is hurtling towards an unprecedented crisis this winter”.
Amid the inevitable blizzard of negativity, many could be forgiven for wondering if they should take out private medical insurance (PMI), instead of relying on the state system.
A good health insurance policy can help you bypass waiting lists and get treatment at a time and place of your choosing but there is one drawback.
It is not cheap and premiums start to get really pricey when you need cover most, as you get older.
There are ways of keeping down the cost, though...
PREMIUM PRICE
Both the Conservatives and Labour are pledging to pump billions of extra cash into the NHS if they win the election but reports of lengthy waiting times and patients treated in corridors are unlikely to go away.
The average wait for a routine GP appointment has just exceeded two weeks for the first time ever, according to Pulse magazine, while NHS figures show that a record
4.41 million were stuck on hospital lists in England alone in August.
National Friendly head of sales and marketingwayne Carter said that bypassing waiting lists is a prime motivation to buy private health care, so that somebody in pain does not have to wait months on the NHS. “Other benefits include consistency of treatment, the privacy of your own room and, in some cases, access to drugs and treatments that are just not available on the NHS for cost reasons.”
Despite the attractions, sales of health insurance have been in the doldrums since Tony Blair’s New Labour government scrapped tax relief on premiums in 1997, driving the price beyond most people’s pockets.
Tom Conner, director at health insurance adviser Drewberry, said most insurers offer three tiers of cover: “The cheapest is a basic policy that covers only inpatient treatment, with no outpatient diagnostics, so you have to use the NHS for that or pay yourself.”
The mid-range tier may also include some outpatient cover, although this is often limited to, say, £1,000 per year. “If you want all your outpatient treatment covered as well as inpatient care, then you need a comprehensive policy,” he said.
PLAN AHEAD
Your age and state of health will affect costs, with a 55-year-old couple in Brighton typically paying £150 a month for a basic plan, rising to £225 for mid-range cover and £275 a month for a comprehensive package.
If they were both 65, a basic policy would cost around £245 a month, with mid-range cover costing £360 and a comprehensive plan £420.
Mr Conner said: “Health insurance gets more expensive as you age, as you are more likely to claim.”
There are things you can do to cut the cost, such as pay a higher excess on claims, restrict treatment to a smaller list of hospitals, or take out a six-week plan, where you only get private treatment if the NHS waiting list runs beyond that.
Mr Conner said do not strip out too much: “You need to be sure your plan is there when you need it most.”
Brian Walters, adviser at private medical insurance broker Regency Health, said your postcode can also affect what you pay. “Someone living in London will pay twice the price of someone living in Scotland.”
Even if you can afford cover today, you may struggle tomorrow.
“Premiums tend to rise by around 10 per cent a year, due to your higher age and medical inflation, which typically outstrips general inflation,” he said.
Unlike motor or home insurance, it is not easy to cut costs by shopping around for renewal: “Your new insurer is likely to exclude any pre-existing health conditions, so many have to stay put.”
‘One innovative insurer rewards its members for being active and eating healthier food’
HEALTH CHOICE
This makes it important to find the right policy in the first place.
While BUPA is the best-known provider, it faces competition from Aviva,axa PPP healthcare,the Exeter and Freedom Health Insurance.
Insurervitality adopts an innovative approach, as it rewards members for being active and eating healthier food, which means they should be less likely to claim.
WPA’S Shared Responsibility plan reduces premiums as you agree to pay 25 per cent of any eligible claim, up to an annual cap.
Mrwalters said your plan will cost the same whether you buy it direct from the insurer or through a broker, making it wise to take advice: “Health insurance is complex, so choose a specialist broker.”
An alternative to health insurance is to self-fund any private treatment you need on a pay-as-you-go basis.
This can be expensive though. For example, BMI Healthcare quotes £11,876 for a complex hip replacement op. Going private is appealing but it is never cheap.