Is private health insurance worth it?

Roman Danaev

19 December 2024

In the UK, residents have the benefit of free healthcare through the NHS. Those comfortable using their services might not even need private health insurance. However, for those who want quicker treatment and more options, private insurance could be a good fit. Not to mention, NHS waiting lists often make the news.

So, you might be wondering — is health insurance worth the cost? In this article, we’ll look at what a private health insurance policy includes and what to consider when making your decision.

What is private health insurance?

Health insurance is a policy that helps manage the cost of private healthcare services, commonly known as private medical insurance. It supports you from the moment you’re diagnosed until you complete your treatment.

To benefit from this coverage, you’ll pay a monthly premium, sometimes annual. This payment helps cover either all or part of your treatment costs, provided those treatments are included in your policy.

Typically, health insurance addresses conditions that develop after your policy takes effect. Any pre-existing conditions — those you had prior to getting the policy — are excluded from coverage by most insurance providers.

Why do people consider private health insurance?

A recent survey sheds light on why many people are shifting to private healthcare, with three main factors standing out. First, the challenges of accessing NHS care drive people to look for alternatives. Long waiting times, limited appointment availability, and frequent cancellations make it tough for many to get timely treatment. By contrast, about 24% of people say it’s simply easier to book private appointments with faster scheduling and convenient online booking systems.

Insurance coverage is another factor — 21% of respondents use private healthcare because they are provided with insurance, either through their job or a family policy.

Finally, the quality of care is a significant draw. Many feel private healthcare provides more personalised treatment and a higher level of care. About 19% say they value the tailored approach in private settings, and 18% believe the overall quality of private care is better. For some (13%), access to specialised expertise that is not readily available on the NHS is the key reason for going private.

How does private health insurance work?

Here’s how private medical insurance works: after choosing a policy, you’ll pay regular health insurance premiums, which act as your investment in coverage that offsets treatment costs when you need medical care.

Policies vary in scope, with each insurance company offering its own set of coverage options, from basic to comprehensive. Some policies require that you visit your GP for a referral before seeing a specialist. This step guarantees that you’re on the right treatment path and that the process remains streamlined.

As you decide on your policy, you’ll encounter options to adjust your premium with an excess amount, a feature that lets you balance how much you pay monthly against what you’d pay directly for certain treatments. Many insurance providers also offer different approaches to underwriting, such as reviewing your medical history or asking for a health questionnaire to help them tailor your plan to your health needs.

What does private health insurance cover?

Your coverage will depend on your provider, policy type, and personal needs, but here’s what you can generally expect from a basic or comprehensive policy.

Basic or core coverage often includes:

• Treatment for acute conditions as an inpatient or day patient
• Access to a virtual GP service
• Cancer treatment (in most policies)
• Coverage for surgeon and anaesthesiologist fees
• A private room for added comfort during hospital stays
• Limited post-op rehab support
• An NHS cash benefit if you opt to use NHS care instead of private

With a basic policy, you’ll likely need to get diagnosed through the NHS before moving to private medical care, which can mean delays if there’s a wait for NHS tests or scans.

As for comprehensive private health insurance, you can typically expect a bit more:

• Covers everything in the basic policy, plus
• Outpatient treatment, often with an annual limit
• Faster access to tests, scans, and consultations, helping you get diagnosed sooner
• Broader cancer treatment options

Since outpatient services are widely used, comprehensive policies cost more due to the likelihood of claims.

You can also tailor any policy to fit your lifestyle with extra options that add to your premium:

• Therapies cover for physiotherapy, chiropractic care, and other complementary treatments
• Mental health cover for access to mental health professionals like psychiatrists and psychologists (some policies only include basic helplines)
• Dental and optical cover to help with routine checkups for your eyes and teeth
• Travel cover for health coverage while you’re abroad
• Extended hospital lists for a wider selection of private hospitals beyond the usual options

Inpatient vs. outpatient cover

Inpatient treatment is when you’re admitted to a hospital and stay overnight. You’re given a bed and receive around-the-clock care. This type of care is covered by most health insurance plans.

Inpatient care coverage usually has no annual claim limits, covering essential aspects like:

• Diagnostic tests (blood tests, scans, etc.)
• Specialist fees for surgeons, doctors, and other professionals
• Costs for treatments, including private prescriptions
• Hospital stay expenses and the care you receive while there

Outpatient care means you’re in and out of the hospital on the same day — no overnight stay required. Plans often set an annual cap on how much you can claim for outpatient treatments.

Outpatient coverage can be capped annually and typically includes:

• X-rays, blood tests, and ultrasounds that don’t require an overnight stay
• Sessions with physiotherapists and other therapists
• Specialist consultations
• Outpatient MRI, CT, and PET scans

If outpatient tests lead to a hospital admission, the rest of your care becomes inpatient. Without enough outpatient coverage, you may need to pay for extra treatment yourself or rely on the NHS once you reach your policy’s limit.

Some health insurance policies limit outpatient treatments, including certain cancer therapies. However, some plans make exceptions and allow coverage for critical outpatient cancer treatments like chemotherapy or radiotherapy, even after reaching your limit.

Common treatments and services included

Below is a summary of common treatments and services included in many health plans:

For more treatments, you can add more treatments and services to your policy:

• You can add coverage for routine dental checkups, cleanings, and basic treatments. Additional benefits usually cover emergency dental work and advanced treatments, such as root canals or crowns.
• Optical add-ons include eye exams, glasses, and contact lenses and may cover certain corrective treatments like laser eye surgery.
• Some policies allow for coverage of newer treatment options like immunotherapy, targeted therapy, and personalised medicine approaches, which aren’t standard in basic cancer coverage.
• Enhanced mental health support options may include access to psychiatrists, psychologists, and therapists for conditions like anxiety, depression, and more severe mental health issues. Some policies may cover online therapy programmes and other digital mental health resources.
• Policies may also allow for additional at-home therapies and support for mobility and daily activity as part of post-treatment rehabilitation.
• By adding an expanded hospital network, you can increase the range of private facilities available for treatment, including those with specialised departments or in convenient locations.

Some policies also offer cash benefits if you opt for NHS treatment for procedures that are otherwise eligible under private insurance. If you wish to alternate between private and NHS services, you’ll find it especially beneficial.

What’s usually not covered

Bear in mind that most insurers don’t cover chronic conditions. These are long-term health issues that typically have no cure.

In general, pre-existing medical conditions are excluded from coverage unless the policy explicitly states otherwise or the insurer agrees to cover some of them. However, some comprehensive plans may offer coverage for acute flare-ups associated with chronic conditions. For instance, if a person with diabetes develops a cataract, a good policy might cover the treatment for that specific issue.

Some common chronic conditions that are usually not included in coverage are:

• Diabetes (a condition affecting blood sugar regulation)
• Asthma (respiratory issue causing breathing difficulties)
• Crohn’s disease (inflammatory bowel disease impacting digestion)
• Chronic Obstructive Pulmonary Disease or COPD (lung diseases that block airflow)
• Arthritis (joint conditions causing inflammation and pain)
• Multiple Sclerosis or MS (disease affecting the central nervous system)
• Heart disease (includes coronary artery disease and heart failure)
• Hypertension (consistently elevated blood pressure)
• Epilepsy (neurological disorder with recurrent seizures)
• Chronic kidney disease (progressive loss of kidney function)
• Parkinson’s disease (disorder affecting movement and coordination)
• HIV/AIDS (viral infection weakening the immune system)
• Cystic fibrosis (a genetic disorder affecting lungs and digestion)

Certain situations also fall outside of typical coverage. For example, expenses related to pregnancy are generally not covered, nor are injuries incurred while playing professional sports or cosmetic surgery for strictly aesthetic reasons. Individuals in high-risk occupations, such as oil rig workers, may find that their jobs are not covered by these policies.

Advantages of having private health insurance

These policies can bring a lot of advantages, making health insurance worth considering for many people. Here are some:

Faster access to treatment

One of the biggest perks of private health insurance is the speed at which you can get medical treatment. With shorter waiting times for appointments and procedures, you won’t have to sit around for months to receive the care you need.

For example, if you require a hip replacement, you might wait several months on the NHS, but with private insurance, you could potentially have that surgery scheduled in just a few weeks.

More treatment options and specialists

Private health insurance gives you access to a broader range of treatments and specialists. You can choose from various healthcare professionals, including some of the leading experts in their fields. If you’re diagnosed with a rare condition, you can quickly consult a top specialist who focuses on that area.

Flexibility in choosing hospitals

Another great aspect of private health insurance is the freedom it offers in choosing hospitals. You can select the facility where you want to receive care, which is especially important if you have a specific hospital in mind based on its expertise. You might be looking for a hospital known for its cardiac care, and private insurance will allow you to opt for that facility.

Private rooms and enhanced comfort

You also have the option of staying in a private room during your hospital visit. This means more comfort and privacy while you recover. Instead of sharing a room with multiple patients, you can enjoy a peaceful space to rest and heal.

Whether it’s a major surgery or a minor procedure, being able to relax without distractions and noise will make a big difference to your recovery experience.

Is NHS coverage enough?

The NHS provides vital healthcare services that are free at the point of use for many UK residents. However, with ongoing challenges, such as long treatment delays and increased waiting times, many people are questioning whether NHS coverage is enough to meet their healthcare needs. Private health insurance, although optional, is a valuable alternative.

There are situations where the NHS doesn’t fully meet the needs of some individuals:

• People with ongoing or complex health conditions may experience long NHS waiting times that delay their access to important specialists and treatments. This may lead them to consider private health insurance for faster care.
• Parents may feel that the NHS doesn’t always offer timely appointments for their children, especially for non-urgent health issues where quick attention could improve outcomes.
• People in jobs where health is crucial for performance might find that NHS delays don’t meet their needs.
• Some patients prefer the privacy and comfort of private rooms during hospital stays, which aren’t that common on the NHS.

Ultimately, whether NHS coverage is enough depends on your individual healthcare needs and how well the NHS meets them. It’s not fair to make a general statement about its adequacy, so evaluate your circumstances and those of your family.

How much does private health insurance cost?

The cost of private health insurance varies considerably based on factors like age, location, medical history, and specific needs. To give you an idea, here’s what you might expect to pay on average for comprehensive coverage:

• 20 years old: around £37/month
• 30 years old: around £48/month
• 40 years old: around £61/month
• 50 years old: around £78/month
• 60 years old: around £113/month
• 70 years old: around £180/month

These estimates reflect a comprehensive policy with a £250 excess (or as close as possible), outpatient cover capped at £1,500 in claims per year, and therapy coverage included. Each provider’s standard hospital list was used along with moratorium underwriting to keep things simple.

Final words

Overall, the benefits make private health insurance worth it, as they tend to outweigh the drawbacks. Think of private healthcare as working alongside the NHS rather than replacing it. When you consider it this way, you can see that you can enjoy the advantages of both the NHS and private medical insurance.