The rising costs and energy rate hikes are taking their toll, and for many, Private Medical Insurance (PMI) seems unattainable. Here we recap some of the most common PMI questions so you can feel more informed about whether it's an option for you now or in the future.
In the past year, the number of cancer patients waiting for more than the NHS 62-day target time for treatment has topped 69,000 across the UK - twice as many as in the same period in 2017-18 (BBC News, 2022).
Even when disposable incomes are tightening, long NHS waiting lists mean there's been a growing emphasis on the need for private medical insurance (PMI) not just for the speed of accessing care but having a greater choice of where you will be treated and by whom.
In a recent poll, we asked our Instagram followers their stance on medical insurance, and nearly half (41%) said they wanted PMI, but that cost was the main barrier to getting it. Here we answer some of your burning PMI questions about how it works, how much it costs and what you need to look out for if you have PMI through your employer.
How does PMI work?
PMI or Health Insurance is a policy that covers the cost of private healthcare from diagnosis to treatment, including all or some of the cost of treatment for acute conditions (i.e. conditions that come on suddenly and have a limited term of treatment), but not chronic conditions (i.e. conditions like diabetes that you may live with all or much of your life).
It works in much the same way as other insurance policies. You pay a monthly premium and claim on your insurance if you need treatment. You can include an excess paid when you claim, which is used to keep the monthly premium down while your insurer covers the remaining cost of your medical bill.
Example: We have PMI through Vitality, with an excess of £100 paid once per year if a claim is made. Last month, Claire hurt her knee to the point she couldn't walk properly - and with two young boys you can imagine how difficult that made things. She needed an MRI scan to get to the bottom of what was causing the pain. From her initial online GP consultation to in-person consultant reviews, it took three weeks. Without the insurance, it would have cost us over £300, and she would still be waiting for a hospital appointment.
How much does PMI cost on average?
The average yearly premium on private health insurance is around £125 a month, but many people pay much less. Our clients typically spend between £70-£100 for a family. The amount you pay depends on your insurer, what's covered on your policy and your circumstances.
Things that impact the cost of your PMI
Who is covered: the number of individuals on your policy - children can be added for a minimal cost.
Your age: like any insurance, the older you are, the more likely a claim, making your premium more costly.
Location: Postcodes play a part, and certain areas will be more expensive to cover than others - Central London is a prime example of this.
Cover Levels: The more comprehensive the plan, the higher the chance of a claim which, again, will increase the monthly cost.
How can I reduce the cost of PMI cover?
There are ways to bring the cost of private medical insurance down, no matter your circumstances. These include:
Increasing your excess amount - Agreeing to a higher excess will bring your monthly premium down - just like car insurance. If a claim is needed, you can determine if it's more cost-effective to pay the excess or the treatment.
Add a waiting period - This means that you can be treated through the NHS within 6 weeks, but if you don't get seen within that time, you can go private and claim on the insurance.
Put it through your business - If you own a limited company, you can pay for your PMI through the business and potentially claim back as a business expense, depending on the number of staff you have.
I have PMI through my employer, but what if I change jobs?
Firstly, with any PMI through your employer, you must check the cover levels to know exactly what you're covered for. If you have a family, you can add partners and children to the plan and pay for the extra cover out of your pre-taxed earnings.
If you’re on a company scheme and are looking to change jobs or employers, you can use a broker to help transfer the plan to a new personal plan or liaise with your new employers to see if they have a scheme so you can keep the benefit.
How to choose the right PMI
Health insurance is designed to complement, not replace, NHS care. Consider what's most important to you when looking at your options — is it budgeting, managing a long-term chronic problem like back pain, or preparing for the unexpected? The answer will help you decide which type of plan is right for you.
Consider working with a broker
Working with a broker means they will do the research based on your preferred budget and will walk you through the key areas that may have a higher chance of a claim. Remember, a broker's job is to know the providers' offerings inside out - so they can pair you with the best option for your circumstance.
Many people don't realise the speed at which the market changes and better products come long - a broker can also manage your plan yealy, so that when it comes to renewal, it’s at the right price and gives you access to the most up-to-date products for your circumstances.
If you have any more questions about PMI or to explore the cost of putting a plan in please, please get in touch matt@meetmargo.uk.
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