Is private health insurance worth it?

The pros and cons of going private

Iona Bain – Virgin Money Living Mentor

by Iona Bain | Independent Money Mentor

Founder of the Young Money Blog and author of Spare Change

There’s a reason why NHS nurses appeared alongside Harry Potter, James Bond, Tim Berners-Lee and suffragettes in Danny Boyle’s opening ceremony for the 2012 Olympic Games. We love the NHS, it’s a British institution and we’re proud of it. Yet around four million people have obtained private health insurance. Some get it through their work, but many others pay for it themselves.

Is it worth it? Well, it depends on what you sign up for. Basic insurance usually covers tests and surgery in hospital as well as day-care surgery. Higher premiums might entitle you to out-patient treatments such as specialists and consultants, and some cash-back for nights spent in an NHS hospital. Here are the advantages and disadvantages of taking out private healthcare…

Private health insurance: the pros

  • For all its many qualities the NHS is no Usain Bolt when it comes to processing patients and you might get quicker treatment going private. The NHS treats nine out of 10 patients within its maximum waiting time of 18 weeks, but the picture varies across hospitals and regions. The 18-week target has been scrapped for hip or knee replacement surgery, cataract removal, hernia repair and other non-urgent operations. You can use your insurance to move up the queue if you’ve waited more than six weeks.
  • You can ask your GP to refer you to a consultant on a private basis for a second or specialist opinion.
  • You can use your cover to pay for a scan or a specialist drug that is not available on the NHS.
  • You may be able to choose a surgeon and a hospital.
  • You can opt for the comforts of a private room rather than a mixed ward. 
  • Access to physiotherapy is quicker. 

Private health insurance: the cons

  • The NHS is seriously good at dealing with serious illnesses and private healthcare offers no improvement over the NHS for cancer, a stroke or heart disease. The NHS offers priority treatment in these cases.
  • Don’t undervalue what you already have! NHS hospitals can be as good or even better than private ones.
  • Private insurance does not cover chronic or incurable illnesses including some cancers.
  • Injuries from dangerous sports are excluded as are transplants, cosmetic surgery and normal maternity costs.
  • Unless you have a policy as an employee benefit, treating existing medical conditions will not be covered except as an expensive add-on.
  • Local treatment or the specialist you need might not be available under your policy options.
  • It’s not cheap! A typical family premium (two adults in their forties and two children under 10) can vary from £60 to £140 per month. Premiums will rise every year, and with age – so by the time you’re older, and more likely to need hospital treatment, you might not be able to afford it. A 65-year-old couple could be paying £300 a month.

Alternative options

  • Self-insure by putting cash into a contingency fund for medical use. The average hip or knee replacement costs £10,000, a cataract operation £2,400 and an MRI body scan £460. If you don’t spend your fund, you haven’t lost it (unlike premiums for a policy you haven’t claimed on). However, your fund needs to be accessible and not invested for growth.
  • If you leave your employer, ask the insurer who runs its Private Medical Insurance (PMI) scheme about a continuation option, as you may be able to keep higher quality cover at a lower cost than if you have to go and arrange a new policy for yourself.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.