The Maze of Private Health insurance
These are tough times for anyone buying Medical insurance policies as premiums outpace inflation and the choice of insurer shrinks. Prices have soared 66% in the last 10 years and the average price per month is £135.
The big four health insurers, Bupa, AXA/PPP, Aviva and Vitality now account for nearly 90pc of the market as they have taken over many of the smaller firms.
The big companies are
BUPA
BUPA having lost popularity over the years seem to have come back recently with some competitive prices. If you are happy to limit the outpatient cover to £500 per year which covers about 2 trips to a specialist you can get the premium down by around £100-£150 per month.
You have to understand also that you have to go with specialists on their approved list. These specialists are contracted to only charge a certain fee. Some specialists have been upset by the limits placed on these fees and do not agree to work with BUPA so you do not always have the choice of specialist you might want.
AXA/PPP
AXA/PPP healthcare’s Essentials plan is a modular policy that allows you to choose from a list of add-on benefits, so that you pay only for what is important to you.
Aviva
Aviva offer competitive prices and have a scheme called MyHealthCounts which rewards you with up to 15% at renewal if you’re fit and healthy
MyHealthCounts is an online health questionnaire and programme, which helps you understand more about your health and the lifestyle choices that might affect it. The programme is easy to follow and is a great way to keep an eye on your own health and also can help you earn a discount off your renewal premium. There is plenty of personalised advice on how to manage and improve your health. Simply update the questionnaire between month 6 and the end of month 9 of your policy year and you will have the chance to receive up to 15% off your next renewal premium.
You spend just 10 to 15 minutes telling them about your health and lifestyle choices – things like what you eat and how much exercise you do. They then calculate your Q Score and offer personalised advice, together with easy-to-use online tools, that could help you improve you health.
Vitality Health
Vitality has a system of earning Vitality points for doing healthy things, like having a yearly health check and tracking your daily activity – walking, running, cycling, swimming or going to the gym.
The more points you earn, the higher your Vitality status, the bigger the rewards and the lower your premium can be. If there are two or more adults on the plan, you’ll need to earn 1,200 Vitality points to reach Silver status, 2,400 Vitality points to reach Gold status and 3,600 Vitality points to reach Platinum status. This can lower your premium by up to 45%
There are a few small independent ones left which include:
WPA
WPA offers a Shared Responsibility plan which offers cut-price premiums because members have to pay 25pc of any claim up to a chosen amount for example £1000 per person; the insurer pays the remaining 75pc. Once you have paid the £1000 then everything else is covered that year.
Exeter
Exeter offers an innovative plan that automatically covers pre-existing conditions after two years of membership, even if they recur during that period. To be eligible, you must be aged 65 or less, and never have suffered a heart condition, stroke, cancer, joint replacement or diabetes.
Passport2Health
They have a new policy that cuts premiums by up to 50% by paying for private diagnosis in Britain and private treatment overseas.
An estimated 60,000 Britons seek cheaper private treatment overseas every year. Passport2Health is offering to do the legwork for them.
Its policy will fund UK diagnosis, including MRI, CET and PET scans, costing up to £1,300 a year. If treatment is required it will pay for overseas travel, accommodation and treatment, and post-treatment rehabilitation in the UK.Policyholders can choose from its network of private hospitals in France, Germany, Spain, Belgium, Cyprus, Portugal, Gran Canaria and Malta. Israel and Turkey should soon be added. Passport2Health isn’t fully comprehensive, as it excludes illnesses that require continuous care over an extended period, including multiple sclerosis and cancer.
This will deter people for whom cancer cover is a key requirement, whereas others may be reluctant to travel overseas for treatment. Passport2Health is a niche product that is most likely to appeal to retired people who have the time to go abroad to get an operation, and treat it like a holiday.
Freedom Health Insurance
Freedom has offered an innovative plan called Your Choice since 2003. Once you are diagnosed as needing treatment, Your Choice gives you a choice of payment methods. They can arrange private hospital treatment on your behalf or alternatively,
you can shop around for private hospital treatment yourself. As a self-paying customer, you are likely to be quoted cheaper prices, and Freedom let you keep the difference in price. You can buy medical treatment overseas, and again pocket any savings, or use the NHS and keep half the cost of private treatment yourself e.g with a quote of £10,000 of private treatment but you use the NHS you will receive £5000 back free of tax. There are four levels of cover, each with an annual limit on inpatient costs. Its Gold plan offers £30,000 a year in inpatient cover, which rises to £100,000 on its Diamond plan.
Permanent Health Company (PHC).
Benenden Healthcare Society.
They are a not-for-profit mutual organisation offering health insurance for a flat rate of just £6 a month, a fraction of the premiums charged by larger rivals.
The money goes into a mutual fund, which members can call on if they need it. This makes them an affordable, viable alternative to private medical insurance, but doesn’t offer comprehensive cover aiming to complement, rather than replace, NHS provision.
If your claim is approved, the mutual will fund treatment at its hospital in Benenden, Kent, or one of 18 affiliated hospitals in Britain. It also offers local private consultations and tests up to £1,500.
This policy won’t suit people who want guaranteed private hospital
treatment, but it may prove an attractive halfway house for others. And it doesn’t automatically exclude pre-existing conditions.
The friendly society’s 900,000 members were traditionally public-sector employees, but in September it opened its doors to any UK resident
SAGA
Saga have tailor made policies where you can decide which level of cover you require plus the excess. You can add in extended cancer care and also their unique 4 Week Wait option, if the NHS waiting time is more than four weeks you can be seen in a private hospital.
However, if your specialist confirms that the NHS can provide the treatment you need locally within four weeks of the date you need it, you’ll be treated by the NHS but you can claim £100 cash benefit for each night you’re in hospital, up to £2,000 in each policy year.
You can choose to protect your No claims bonus. Your policy starts with 35% No claim discount. With protection you can have one claim in the year. If you do not claim your policy will go up to 40% discount. After one claim with no protection you go down to 25% discount the next year and with another claim you go down further.
Top Tips for Buying your policy
1. Try and buy your policy while you are healthy!
Many insurers exclude pre-existing medical conditions, instead focusing on essential conditions that respond quickly to treatment.
2. Prices of policies can be reduced by increasing the excess or by cutting out all outpatient treatment but including all scan and tests. Try tweaking your policy to fit your budget
3. Ask about how the increases work as you age.
4. Check the cover provided includes hospitals you would want to go to. Most providers will give you a list to choose from and you may be able to cut costs if you opt for a shorter list.
5. Decide whether you want Mental health care as excluding this will get your premium down
6. Decide if you want fully underwritten or moratorium policies.
If you choose a fully underwritten private health insurance, you will have to give your provider your full medical history. With a moratorium plan, you will only need to give limited information to your insurer.
A fully underwritten policy is likely to give you wider coverage but will be more expensive. A moratorium policy will be cheaper and will come with blanket exclusions on some pre-existing conditions.
7. Try speaking to a broker
Private health insurance is a complicated product so it is best to speak to a broker, especially if you have had medical problems or need specialist cover for certain illnesses.
To find a broker, check out the Association of Medical Insurers and Intermediaries (AMII). Comparison sites are a good starting point to find out how much cover may cost.
Private health insurance is not without its merits with its ability to speed up diagnosis and fast-track consultations. Extended cancer care, private rooms and drugs that may not be provided on the NHS are also a good reason to stay covered.
However private health insurance can be expensive – premiums rise every year with age. The elderly are often taken directly by ambulance after calling 999 to a NHS hospital where they are well looked after.
Some people have in their mind an age when they will stop paying vast sums to insurance and be content with the NHS system.
Others suggest paying in to another account what they would pay in premiums each year and then pay for treatment if needed.
The Choice is yours!
Sources are-Dean Sobers- Which magazine
Harvey Jones Telegragh 2013