PRICE OF GOING PRIVATE
WITH the price of health care rising at around eight per cent annually, it is increasingly difficult for many people to opt for private medical treatment rather than leave themselves at the mercy of the crisisridden National Health Service.
But there are ways to access private medical care without breaking the bank which will comfort those who could be faced with waiting an age for a raft of treatments now being held up by the chronic shortage of beds at NHS hospitals over the winter months.
Traditionally, the most prudent route for those requiring access to private medical care is to buy insurance. Top drawer private medical policies will cover the cost of diagnosis, operations and after care.
But sharp premium increases and tax rises have put off buyers. Instead, many households have opted to ‘self-fund’ treatment through accessing their savings.
According to the latest analysis by consultants LaingBuisson, 11 per cent of the population have private medical insurance. Although the number of people covered in 2015 rose slightly, those with individual policies (rather than work-based cover) fell by 1.7 per cent.
Ten years ago, LaingBuisson says, some 60 per cent of revenue generated by independent ‘acute’ medical hospitals was private medical insurance based. Now, the comparable figure is 46 per cent and it predicts that over the next five years, this percentage will drop further with more people self-paying.
Brian Walters is a director of medical insurance broker Regency Health, based in Cheltenham. He believes private medical cover is caught in a ‘perfect storm’.
HE says: ‘Private medical insurance is not an essential purchase given there is a free alternative in the National Health Service. But we are seeing more people enquiring about cover given the unrelenting pressure on the public service.
‘There is no growth in the overall consumer market, though, because escalating premiums are causing people to cancel. The Government’s ill-considered increases in Insurance Premium Tax – from 6 per cent to 12 per cent between October 2015 and June 2017 – will only exacerbate this problem and place more of a burden on the NHS.’
A poll conducted by insurer Bupa says premiums should be tax-free – as with life insurance.
More people are also waking up to the fact that you do not need insurance to access private medical treatment. You can self-pay although for the treatment of serious conditions the figures can be mind-blowing.
For example, Walters has a client who so far has claimed £150,000 under a policy for cancer treatment that is ongoing. Self-funding this cost would have been a non-starter.
Yet he and other experts insist affordable cover – without compromising benefits – can still be bought if people bat clever and follow these six key pointers. 1 FIRST, check if your employer offers private medical cover as part of its array of work benefits.
If it does, and you are eligible to take it out, do so because cover will invariably represent better value for money than buying a stand-alone policy. But you will have to pay tax on the cost of the cover at your highest rate.
If it does not, you have two choices. Buy cover from an insurer – main players include Aviva, Axa PPP, Bupa and VitalityHealth – or put money away in a savings account so that it can be drawn upon if private medical treatment is ever needed. 2 B U YERS of cover must understand what they can expect from their insurance if they need private medical treatment.
For example, most policies will not cover pre-existing medical conditions, chronic illnesses such as diabetes and epilepsy, organ transplants or cosmetic surgery.
Also, look to see if there are any limitations on cover, especially for illnesses such as cancer. The fewer restrictions there are for such vital aspects of cover, the better. Some insurers will cap how much they are prepared to pay towards the cost of surgeons’ and anaesthetists’ fees. Any surplus will land you with a bill. An excess will usually be payable when a claim is made, typically a minimum £100 a year. Emily Page, a director of broker Medisurance, based in Elstree, Hertfordshire, says: ‘The higher the excess you choose, the lower your premiums become. It is also sometimes possible to choose an excess per claim rather than per year which reduces premiums further.’ 3 LIKE other forms of insurance, most providers will reward you for not making a claim. This is through a no-claims discount applied to your premiums when your cover is renewed annually.
But there are drawbacks. If a claim is made, these discounts are reduced, causing premiums to rise sharply. Moving to another insurer for cover also becomes nigh on impossible.
For a small premium uplift, some insurers allow you to protect your no-claims discount. You can also buy cover which does not include a no-claims discount. It means your premiums will not rise if you make a claim although the insurer still has the right to increase them because of medical inflation and any tax increases. 4 IF YOU are prepared to limit the choice of hospital you can get treatment in, the insurer may pare back your premiums.
Avoiding Central London hospitals will help reduce premiums as will an agreement to use a chain of hospitals that an insurer has negotiated special rates for.
Also, some insurers will discount premiums if you are happy to use the National Health Service and it can treat you within six weeks of your illness being diagnosed. If your wait is longer, you get immediate access to private treatment. 5 SOME insurers now encourage healthy living in the hope it will keep down claims. VitalityHealth is a leader in this field, for example offering policyholders gym membership discounts.
Page says: ‘Insurers want to motivate customers to stay healthy so that they do not claim as much and it reduces the pressure on them to increase premiums.’ 5 TAKE advice. Contrary to popular belief, it does not cost more to buy cover through a broker.
A quality adviser will recommend the best-value plan – not necessarily the cheapest – and give ongoing support, for example if you are making a claim.
Website Amii.org.uk, run by the Association of Medical Insurers and Intermediaries, can help find you a broker specialising in private medical insurance.
Although financial comparison websites will provide quotes for cover, opting for the cheapest one is unwise because it will probably land you with an inferior policy.