Private medical insurance: Uncovered is unhealthy
This week’s newspapers brought the usual batch of stories about problems in the NHS. On Tuesday alone, the headlines included “NHS in shock as boss resigns,” “GP tells sick not to call dangerous NHS helpline,” and “Manchester tops health authorities sick list”. With a constant flow of stories like that confronting them, it is small wonder that more and more Britons want to ensure they will qualify for private hospital treatment if their own health collapses.
Industry figures show that there were 3.2 million people in the UK with private medical cover in 1997, compared to just 2.5 million 10 years earlier - an increase of 28 per cent.
David Ashdown is a director at Western Provident Association, one of the UK’s five biggest health insurers. He says: “With all the problems that have been highlighted in the NHS, more and more people are thinking they will have to look at the alternatives.”
Pursuing those alternatives means buying a private medical insurance (PMI) policy. These plans all concentrate on the same core areas of professional fees, hospital charges, specialist treatment and drugs. The cover they provide means policyholders can avoid NHS waiting lists for a wide range of routine operations, and enjoy a little extra comfort during their hospital stay.
The plans on offer fall broadly into two groups: comprehensive schemes and budget schemes. Comprehensive policies, the more expensive option, will cover all the hospital-related costs mentioned above, plus the cost of any outpatient treatment you may need. Budget policies exclude many (if not all) outpatient treatments and may entitle you to private hospital care only if NHS waiting lists reach a certain length.
This issue of price has led PMI to a crisis of its own. The more expensive premiums become, the more people decide they cannot afford PMI. Those left in the market tend to be the very customers who are most likely to make a claim, which drives premiums up.
Most of the policies in the latest generation of PMI plans have set about trying to break this cycle. Ashdown says: “We have got to bring premiums down if people are going to have any form of cover at all.”