What is private medical insurance?
Private medical insurance is designed to cover the costs of private medical treatment for what are commonly known as acute conditions.
Most insurers define an ‘acute condition’ as a disease, illness or injury that is likely to respond quickly to treatment which aims to return you to the state of health you were in immediately before suffering the disease, illness or injury, or which leads to your full recovery.
Most people buy this type of insurance to gain the reassurance of knowing that treatment is available promptly, if they become ill or are injured.
As a private patient you can often choose when treatment will take place, the specialist who treats you and the hospital. You will usually have the privacy of an en-suite room complete with TV and other home comforts.
Some illnesses and treatments will not be covered by a private medical insurance policy and these are common to most schemes. It is also important to remember that this insurance is not designed to replace all the services offered by the NHS. Some, such as accident and emergency, are beyond the scope of most private hospitals.
How do I buy private medical insurance?
Some insurers will arrange private medical insurance cover differently from the above - for example, over the phone. However, this cover may only be provisional until they receive your fully filled-in application form.
Cooling-off period
If you do not receive full details of the terms of your cover at the time you decide to buy the policy, you will be given at least 14 days from when you receive the information to change your mind. If you do decide not to go ahead, you will receive a full refund of premiums you have already paid, unless you have made a claim. However, once the cooling-off period is over, you will not usually be entitled to receive a refund of premiums already paid.
How do I choose the right cover?
When looking at cover, it is useful to know that treatment is categorised in the following way.
- In-patient treatment
Treatment which, for medical reasons, means you have to stay in hospital overnight or for longer. - Day-patient treatment
Treatment which, for medical reasons, means you have to go into a hospital or day-patient unit because you need a period of clinically-supervised recovery. However, you do not have to stay overnight. - Out-patient treatment
Treatment given at a hospital, consulting room or out-patient clinic where you do not go in for day-patient or in-patient treatment.
There is a large variety of schemes available – from low-cost schemes, offering limited cover, to those which offer wide-ranging cover and benefits. Most schemes offer cover for in-patient and day-patient treatment, but not always out-patient treatment.
You will need to decide what sort of cover you want. There are a number of things you will have to consider, here are just two examples.
- Do you want your cover to include seeing a specialist as an out-patient?
- Do you want a choice of hospitals, or would you be satisfied to receive any treatment that you might need in a hospital available from a limited range chosen by your insurer?
The answers you give to questions such as these could have a significant effect on the premium that you pay.
What am I covered for?
Remember, private medical insurance is designed to cover treatment for curable,short-term illness or injury (commonly known as acute conditions). Some illnesses and treatments are never covered and these are common to most schemes.
| Usually included | Sometimes included | Usually not included |
|---|
| Cover for treatment of short-term (acute medical conditions) | Out-patient diagnostic tests | Conditions you had before taking out the insurance (commonly known as pre-existing) conditions |
| In-patient diagnostic tests | Out-patient consultatons and treatment with a specialist | GP services |
| Surgery as an in-patient or day-patient | Overseas cover | Cover for long-term illnesses which cannot be cured (usually referred to as chronic conditions) |
| Hospital accomodation and nursing | Cash payment for treatment received as an NHS in-patient | Accident and Emergency admission |
As well as those listed above as ‘Usually not included’, the following conditions or treatments are normally outside your cover.
- Drug abuse
- Self-inflicted injuries
- Out-patient drugs and dressings
- HIV/AIDS
- Normal pregnancy
- Cosmetic surgery
- Gender reassignment (also known as sex change)
- Kidney dialysis
- Mobility aids
- Experimental treatment
- Experimental drugs
- Organ transplants
- War risks
- Injuries arising from dangerous hobbies
Will my premiums go up?
Whichever scheme you choose, your premiums may rise above the rate of general inflation. This is because of factors which affect how healthcare is provided in all western economies.
"Each year more people claim on their insurance cover for private medical treatment. A hip replacement for example, typically costs around £6,000 and is a common procedure, particularly for older patients."
The number, sophistication and cost of treatments to improve quality of life are increasing steadily. Most private medical insurance policies aim to cover these treatments as they become established medical practice and available privately.
Likewise, the sophistication and complexity of tests used to diagnose illness and injury are also increasing. Such tests are becoming far more widely available in private hospitals – for example, Magnetic Resonance Imaging (MRI) scans which cost around £500 each.
There may also be other factors that affect your premium - for example, a no-claims discount, or payment method.
Will my premiums increase with age?
As people get older they are more likely to need and receive medical treatment, which means that private medical insurance premiums will usually increase with age to reflect this.
Will I need to provide details of my health?
As described previosuly in this guide, there are a number of medical conditions which you will not be able to get private medical insurance cover for. You will not normally be covered for an illness from which you are already suffering, or have already had (commonly known as pre-existing conditions). There are two main methods that insurers can use to accept your application for cover – medical history declaration or moratorium. All medical insurers will offer you the medical history declaration option. Only some medical insurers offer the moratorium option.
- Medical history declaration
You are normally asked to fill in a form, giving details of your medical history. If necessary, the insurer may write to your doctor for more information. It is essential that you give all the information you are asked for. If you dont, you may find that your insurer may refuse to pay any claim that you make in the future, or may cancel your policy.
If you are not sure whether or not to mention something, it is best to do so. If you have a medical condition which is likely to come back, the insurer will issue a policy, but that condition (and any related to it) may not be covered, either indefinitely, or for a set period of time. - Moratorium
This is when you are asked to fill in a form, but you are not asked to give details of your medical history. Instead, the insurer does not cover any medical condition which existed in the last (usually) five years. These conditions may automatically become eligible for cover, but only when you do not have symptoms, or receive treatment, medication, tests and advice (from your GP or a specialist) for that condition for a continuous period of (usually) two years, after your policy has started.
There are some conditions, for example chronic conditions, that will probably never be eligible for this delayed cover because you will always need regular or occasional treatment, medication, tests or advice for them.
You should not delay getting medical advice or treatment, simply to get cover. If your insurer offers a “moratorium”, they will give you printed information explaining how their particular moratorium works. You may also want to ask the insurer, or salesperson, to explain how it works.
What if I want to change to a new insurer?
You may change insurers. However, it is important to remember that your new insurer may not cover any previous, or existing medical conditions, which your current insurer does cover. You may also lose any premiums you have paid up front.
And, the level of cover on any new policy may vary from that available with your previous insurer.
It is best to check with your new insurer, or whoever is selling or arranging a new policy for you, how the change may affect your cover.
Will my cover be affected if I am disabled?
Insurers will not refuse to cover you because you are disabled. As with other pre-existing conditions, your insurer may exclude cover for treatment arising directly from your disability. However, it must be reasonable and fair for them to do this.
If you sign a ‘medical history declaration’, you must reveal all relevant information about your disability. If your policy does not cover pre-existing conditions, then an existing medical condition causing disability, or arising from it, will not be covered.
How do I make a claim?
Apart from emergency admissions to NHS hospitals, all medical treatment has to start with a referral by your GP to an appropriate specialist.
| You | Your insurer |
|---|
| Before you receive any treatment privately, you should call you insurer to check that you are covered for the treatment that you will receive. In fact, most insurers insist that you do this. | Your insurer will give you all the guidance you need, confirm what your cover includes and, if necessary, send you a claim form. |
| Your GP and your specialist will probably need to fill in and sign your claim form. Your GP may charge a small fee for this which will probably not be covered by your insurance. | Stay in contact with your insurer who will confirm whether any treatment you plan to receive is within your cover. |
| Your specialist may recommend tests, admission to a hospital as an in-patient, or day-patient treatment. | Your insurer will tell you how they pay claims. Remember if you have chosen to pay an excess, you will have to make a payment. |
Most hospitals and some specialists have their bills paid directly by the insurer.
Others will send the bills to you. |
How is private medical insurance regulated?
- An industry regulator
Any general insurance, which includes private medical insurance, sold in the UK is covered by the General Insurance Standards Councils rules. This applies as long as the insurer or anyone else advising on, or selling, private medical insurance is a member of GISC. The rules include a private customer code. You can get a copy from GISC members or from GISC. - Your application form
Your application form is a very important document. In fact, it forms the basis of your contract with your insurer. Always fill it in fully and accurately. If you do not, your insurer may refuse to pay your claim and could even cancel your policy. - Absolute confidentiality
By law all insurers have to treat personal information, especially medical details, with absolute confidentiality. Totally anonymous statistical information is sometimes given to outside organisations carrying out research. - A formal procedure for handling complaints
All insurers, and anyone else advising on or selling private medical insurance, who is a member of the General Insurance Standards Council must have their own complaints procedures in place. This means that if you have a problem with any part of your cover, speak to your insurer or adviser first. If you are not satisfied with the way in which your complaint is handled, there is an independent dispute-resolution procedure which you will find details of in the complaints procedure your insurer or adviser gives you.
Useful addresses
If your insurer or adviser cannot sort out a complaint, the following organisations will tell you how to go about taking the matter further (your insurance company’s literature will tell you which one to contact). Their decisions are binding on the insurer, but do not affect your right to take legal action if you want to do so.
Financial Ombudsman Service
South Quay Plaza, 183 Marsh Wall
London E14 9SR
Phone: 0845 080 1800
E-mail: enquiries@financial-ombudsman.org.uk
General Insurance Standards Council
9th Floor, 110 Cannon Street
London EC4N 6EU
Phone: 0845 601 2857
E-mail: complaints@gisc.co.uk