How to pay for private healthcare
Peter Hatcher, 71, of Nuneaton, Warwickshire, had been living for two and a half years with a painful left knee joint — the result of sports injuries and arthritis. “The pain, at times, was unbearable. Not being able to join my wife and friends on regular walking trips, play golf or walk the dog — my quality of life was being impacted on a daily basis,” he says.
However, Hatcher was told his condition was not serious enough to qualify for NHS treatment, he says. There would need to be more degradation of the knee joint before he would even be put on the waiting list.
Insurers expand services
FT reader Harry* is in his 60s and a firm fan of insurance, with a Bupa policy for several years. He says: “I used to think that private health was just a faster, more convenient version of the NHS offering. My experience is that this is no longer the case. The private sector provides a better quality of service too.”
Exactly what is covered by private health insurance varies between providers and cover levels. Dr Katie Tryon, director of health strategy at health insurer Vitality, says insurers have expanded their offering over the past 20 years so now it can include “full care including cancer and primary care”.
How to find good medical cover
Private health insurance is complicated, so it’s best to get advice from an independent broker, particularly if you have a medical history. It doesn’t cost more to go with an intermediary than buying direct.
You can search for a broker on the British Insurance Brokers’ Association. The Association of Medical Insurers and Intermediaries (AMII) lists 120 independent vetted experts. My Tribe Insurance also makes recommendations.
A broker should determine your requirements and medical details, and then source a suitable policy.
Before signing up with an intermediary, check if they are Financial Conduct Authority registered and look for Google reviews. Ask if they are “whole of market” and if they’ve done their IF7 exam from the Chartered Insurance Institute, a quality mark.
Comparison website GoCompare reports virtual GP services are now a standard benefit, often with the ability to schedule same-day appointments, direct referrals and prescriptions.
Some providers offer preventative healthcare too. Vitality incentivises customers to look after their own health through a points-based system which can deliver lower increases in premiums.
Brokers recommend people approaching retirement with company PMI schemes, start exploring individual policies while they are still in good health. Feiner at LifePoint Healthcare, says: “We are getting lots of phone calls from people who are too late to insure — a condition has already been diagnosed or they are symptomatic.”
With full medical underwriting, which requires lots of detail about your health, some insurers might cover a historical condition — at a cost.
Some FT readers with insurance are wary of claiming for fear of boosting their premiums. They use the NHS when they can, and turn to insurance only when waiting lists are very long. They might also self-pay for the occasional consultation or small operation.
Independent reviews from private healthcare research group My Tribe Insurance, rank two not-for-profit insurers top, singling out WPA and Exeter for making sure claims don’t impact renewals. But comparing like for like is tough.
Pick and mix
FT reader Paul* recommends the “pick and mix” approach. If you want to keep insurance as a backstop but reduce the cost, consider dropping mental health cover or physiotherapy. Applying a hefty excess, say £500 or £1,000 a year, can also cut the cost substantially, as can adding a clause that says you will use the NHS if the wait is less than six weeks.
But look out for “directional care’’ — it’s a popular cost-cutting option where the insurer provides a restricted list of doctors and hospitals. Feiner warns: “Some top specialists in specific fields might not be on the list.”
Chris Steele, founder of My Tribe Insurance, says: “Many leading insurers such as The Exeter, Axa Health, Aviva, Bupa and Vitality offer lower-cost, treatment-only plans.” These cover major surgeries but exclude outpatient bills for consultations, tests and scans, he says. In most cases, with a treatment-only plan, you need an NHS diagnosis or to self-pay for consultations and scans. Once you’re diagnosed, you can claim for private treatment.
Cheapest isn’t always the best. Dr Penny O’Nions, principal of Buckinghamshire-based The Onion Group, a PMI adviser for 40 years, says: “It might mean claims are not paid promptly. And don’t imagine they will always remain cheap. Always understand the limitations of a policy.”
Save the money in advance
Still, some experts advise against insuring for routine operations such as cataracts. James Baxter, founder of Tideway Wealth says: “Buying insurance against near-certain expenditure is always very expensive.”
He suggests researching common operation costs and estimating how many you might need. Then compare creating a reserve fund with paying a health insurance premium — the average cost of health insurance, according to My Tribe Insurance is £86.07 per month, rising to £112.90 per month for a 60 year old. Baxter suggests setting up an Isa. “Unneeded funds can be put towards other things.”
Self-paying is not only for those who have never had individual insurance but also for those switching out of insurance. Tom* is 76 and his wife is 77. He says they stopped their health insurance when the premium was about to rise substantially, mainly due to age and maybe also because of claims.
So instead of paying more than £7,000 a year to an insurer, the couple started saving into a bank account earmarked for medical expenditure. At first they paid £800 per month into the account, now it’s £1,000, says Tom.
You need to be prudent to self-manage such a fund — to avoid raiding it for holidays and to take careful account of medical inflation and the likely need of increasing care with age.
Clearly, a private hospital may appear better because you get a room on your own and better food. Nevertheless, many private hospitals don’t have full emergency facilities. If things go wrong, you may be transferred to the NHS.
In the end, it comes down to risk appetite. Jason Witcombe, chartered financial planner at Empower Partners, says: “Ultimately, you need to ask yourself how much more relaxed you and your family would feel if you paid for this insurance and then go with what your gut tells you.”
*Names have been changed.
Self pay negotiation tactics
It’s possible to negotiate on costs, either by speaking to the manager of the hospital or asking the consultant’s secretary if there are any package deals. Try something gentle like “Is there any room for negotiation?”
Also consider centres of excellence for conditions such as hernias and cataracts because they may have cheaper prices than your local private hospital. For example, the London Hip Clinic states an upfront cost of £9,950 for hip replacement surgery that could cost £14,000 elsewhere, and offers finance options to pay in instalments.
Meanwhile, Practice Plus Group claims to have up to 30 per cent lower costs than other private hospitals based on current cataract prices. It has 10 hospitals and surgical centres. Its website displays the costs for procedures, which is a starting point for research, as is the Private Health Information Network, which has datasheets that show charges from specific consultants for certain procedures.
This story originally appeared on: Financial Times - Author:Moira O'Neill
