In the UK, most of our health needs are met by the NHS. Our health service covers everything from broken bones to cancer treatments and is considered to be one of the world’s best public healthcare systems. Given the expanse and quality of the NHS, we ask ourselves – why have private health insurance? Here’s our breakdown. 

What Is Private Health Insurance? 

Private health insurance covers the cost of certain treatments and procedures at private healthcare facilities. The extent of what the insurance covers is determined by the individual policy – as a general rule, though, pre-existing conditions, cosmetic surgery, and pregnancies are not included. 

What Are the Pros And Cons of Private Health Insurance? 

Pros 

• Shorter waiting times – Patients normally wait for shorter periods for treatment in private healthcare. While waiting times for particular treatments vary between hospitals in the public system, the NHS has set a maximum referral to treatment time (RTT) of 18 weeks. In the most recent statistics published, 84.8% of patients received treatment within the 18-week period since referral – falling short of the government’s target of 92%. 

• More choice – Private healthcare offers more options to patients. Alongside access to certain treatments and medicines that aren’t available on the NHS, going private gives you the choice of where you receive treatment and by which specialist. 

• Better quality – While the standard of care you receive in the NHS can be exceptional (especially for cancer treatments), the private sector can offer a higher quality across a broader range of services. Driven by profit rather than government targets, there’s more competition between privately-owned health centres. This results in greater investment in cutting-edge technology and treatments, and better customer service – you’d be unlikely to be sharing a ward in a private hospital. 

Cons 

• Cost – The main drawback of private healthcare is clearly the cost. Receiving treatment privately isn’t cheap, and it’s getting more expensive by the year. The Consumer Price Index (a statistical estimate that indicates how much something costs compared to other products or services) of private health insurance has increased by an average of approximately 5% every year in the past decade. The average premium for private health insurance in the UK now stands at £1,435 a year. 

• Limited coverage –  As already mentioned, private health insurance doesn’t guarantee treatment for every condition. There are exceptions in every insurance product, so we recommend reading through the details of the individual policy to avoid any expensive misunderstandings later down the line. 

Alternatives To Private Health Insurance 

Although private health insurance might seem tempting, it’s not for everyone. The high costs and limitations in coverage certainly dissuade many, as does the fact that a good level of healthcare is provided by the NHS.  There are however a number of alternatives to taking out an expensive private health insurance policy.

Critical Illness Insurance 

Often included as part of life insurance policies, critical illness cover will pay-out in the event that you suffer from a certain condition. The point of the policy isn’t to help you pay for medical treatment (although you can, of course), but to help you meet costs when you’re unable to work due to ill-health. 

Cash Plans

You don’t need to have private health insurance to be able to access private healthcare. A more cost-effective way of receiving a private service is to sign up to a cash plan. This essentially means selecting a particular service with a private practitioner, whether it be for dental treatment or a series of chiropractor sessions, and spreading the cost over a period of time. 

Save

Another alternative is simply to open a savings account and put away as much as you can afford, ready to be used for private healthcare should the need arise. In the UK, you’re allowed to save up to £20,000 tax-free annually in an ISA.

Private health insurance can help individuals access fast, high-quality medical treatment – but often at a steep cost. Weigh up the price with the benefits you’d receive to determine if it’s worth the high premiums, and if not, consider the alternatives to give you peace of mind when considering healthcare options.  

At IMC, our expert financial advisors can help you to manage and grow your finances. Whether you need advice on pension planning, investments, mortgages, or life insurance, get in contact with us and see how we can help.