If you’re someone who has invested in private medical insurance to provide quicker access to treatment and benefit from the services of your local private hospital, you will no doubt have noticed that your health insurance premiums have been climbing in recent years. A typical family of two adults in their 40s and two children under 10 could be paying anything from £700 to £1,650 per year, according to ThisisMoney.
Why are private medical insurance premiums on the increase?
The health insurance companies such as Bupa and AXA PPP face a similar challenge to the NHS. Increasing demand for healthcare at an increasing cost. The cost of healthcare is increasing as researchers and doctors discover new ways of treating healthcare problems or find cures for conditions that previously had no cure. A good example is macular degeneration, an eye condition affecting the elderly which results in blindness. Not too long ago, there was no widely accepted treatment for the condition; but the introduction of an injectable drug called Lucentis meant that thousands of people could be treated successfully through a series of injections, but at a high cost to the insurance company. In the UK, spending on health care has increased by around 4% a year since the National Health Service (NHS) was founded 65 years ago. According to Laing Buisson, the average rate of increase of medical insurance subscription costs per subscriber has increased at 5.25 per cent a year during the period 2000-2010.
How can I reduce the cost?
Here are some ways that you can cut the cost of your health insurance renewal:
- Use online comparison sites?: The health insurance sector has been slow to introduce price comparison sites where you can compare different health insurance products. Sites like ActiveQuote now enable you to make a comparison quickly and easily.
- Increase the excess: As with car insurance, if you increase the excess that you pay when you make a claim, you can bring down the premium significantly.
- Pay an annual fee rather than a monthly premium: Most insurers will offer you a discount if you agree to pay your premium a year in advance.
- Adjust the levels of cover: Most schemes give you options for the amount of outpatient cover (e.g. physiotherapy) that you require. You can select to have no outpatient cover, a level of outpatient treatment with a set limit or a scheme which covers outpatient treatment in full. The more you get, the more you pay!
- The Six Week Wait Option: Some schemes have been made more affordable by only covering treatment where the waiting list is no longer than six weeks.
- A restricted hospital list: Most schemes offer a standard list of private hospitals. By reducing your choice of private hospitals (e.g. by accepting that you will only be treated in a private patient unit in an NHS hospital), you can make significant savings.
Buy private healthcare when you need it
In response to rising premiums, some have decided that they will put money aside in savings and use this when needed to meet their private treatment needs. You could decide just to pay for a private consultation and the related scans and investigations or to fund any private surgery that you need from savings. A private consultation can cost between £150 to £250, An MRI scan can cost upwards of £500.
Most private hospitals operate “Fixed Price Surgery Schemes” where you can agree a fixed price for the operation you need. A knee replacement might cost around £10,000. But prices can vary significantly form hospital to hospital. So it makes sense to shop around and compare the costs of private operations.