Private medical insurance: what it covers, what it costs and what it will never do
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Ask people why they take out private medical insurance and the answer is almost always the same: the waiting. The NHS remains remarkable at what it does, particularly in an emergency, but the waiting list for routine hospital treatment in England still runs to around seven million cases. For someone living with a painful hip or waiting on a diagnosis, the idea of being seen in weeks rather than months is a powerful one, and it is the main reason private medical insurance, or PMI, keeps coming up in our conversations with clients.
PMI is an insurance policy that pays for private treatment of conditions that respond quickly to care, from the initial consultation and diagnostic tests through to surgery and a private room. It sits alongside the NHS rather than replacing it. You keep your GP, you still call 999 in an emergency, and you dip into the private system for the eligible treatment your policy covers.
The shape of the cover
Policies range widely, which is both a strength and a source of confusion. A basic plan might cover inpatient treatment only, meaning care that involves a hospital bed, while leaving you to use the NHS for outpatient consultations and tests. A comprehensive plan adds outpatient cover, mental health support, physiotherapy and a wider choice of hospitals. Most policies include cancer cover, though how far it extends varies noticeably between insurers, so it is one of the sections worth reading twice. You can usually flex the premium too, by choosing a bigger excess, restricting the hospital list, or agreeing to use the NHS where the wait is short, in exchange for a lower cost.
Take Rachel, aged 44, a fictional client with two teenagers and a busy self-employed life. She has no sick pay to fall back on, so being off her feet for months waiting for knee surgery would hit her income as well as her health. For her family, a mid-range policy costing around £150 a month with a £500 excess felt like money well spent. Her neighbour, a healthy 30-year-old with generous employer sick pay, might sensibly reach a completely different conclusion. There is no universal answer here, only a trade-off between premium, cover and what the wait would cost you.
What PMI will not do
This is the part that catches people out, so it deserves to be said plainly. PMI covers acute conditions, meaning ones that can be cured or substantially improved by treatment. It does not generally cover chronic conditions such as diabetes or asthma, which need ongoing management, and it does not provide accident and emergency care, which stays firmly with the NHS. Pre-existing conditions are usually excluded, either permanently or until you have been symptom-free for a set period, depending on how the policy is underwritten. And premiums are not fixed: they tend to rise each year with age, medical inflation and any claims, so a policy that is comfortable at 44 needs to still be affordable at 64.
Before comparing quotes, it helps to be clear-eyed about a few questions:
• Could you fund one-off private treatment from savings instead of paying premiums for years?
• How would you cope financially with a long NHS wait, especially if you could not work?
• Which exclusions and excesses apply, and how is the policy underwritten?
• Will the premium still be manageable as it rises with age and claims?
It is also worth knowing that switching insurer later is rarely as clean as switching your car cover. Anything you have been treated for in the meantime may count as a pre-existing condition with the new insurer, so the time to shop around hardest is at the start, when your medical history travels with you most easily. Reviewing the policy at each renewal, rather than letting it roll over, keeps the cover honest against the premium.
Some employers offer PMI as a workplace benefit, which can be better value than buying alone, though it may be taxed as a benefit in kind and usually ends when the job does. Some people instead choose a health cash plan, a cheaper product that pays small fixed sums towards everyday costs such as dental and optical care, which suits a different need entirely. Naming the problem you are actually trying to solve, quicker treatment, income protection, or everyday health costs, is what points you to the right product, and sometimes the honest answer is a mixture.
In summary
Private medical insurance buys speed, choice and comfort at a time when NHS waits remain long, and for many families that reassurance is well worth paying for. It is not a replacement for the NHS, it will not cover chronic conditions or emergencies, and the premiums rise over time, so it rewards a clear look at what you need before you buy rather than after you claim.
If you are wondering whether private medical insurance has a place in your family's plans, or how it fits alongside your other protection, get in touch with us at ACJ and we will happily talk it through with you.