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What is private medical insurance?


Private medical insurance is a form of health insurance designed to cover the cost of private treatment in hospitals. As well as offering privacy, comfort and higher levels of attention PMI also enables you to avoid or by-pass what might otherwise be a long wait for some treatments under the NHS.

Private Medical Insurance, also called PMI, pre-dates the founding of the National Health Service in 1948, but is now a sophisticated market place with a wide choice of policies on offer from leading not-for profit organisations such as BUPA and PPP as well as a number of major insurance companies.

What is excluded from private medical insurance cover?

Exactly what is excluded from your PMI policy varies depending on level of cover and from one insurance company to another. Typically, treatment for drug abuse or alcoholism, infertility treatment or standard pregnancy, HIV/AIDS and most cosmetic surgery are all excluded, and unless your policy is generously comprehensive (and expensive) private visits to your doctor, routine medical examinations and non-emergency dental care outside hospital will also be excluded.

To begin with PMI policyholders will usually be prevented from claiming for the cost of any treatment relating to ‘pre-existing conditions’, namely any health problem you have or of have had at the time of your application or prior to inception of the policy. Generally, PMI providers will refuse to pay for any treatment relating to any pre-existing medical problem until two full years without treatment have passed, then the condition may be covered, but some PMI policies exclude such conditions for life so it is important to check carefully if this might affect you.

Besides the kinds of exclusion referred to above, most private medical insurance policies exclude long-term chronic illnesses such as multiple sclerosis and arthritis for which there is no cure or which do not respond to treatment. That said some policies cover the cost of treating health complications resulting from or associated with an excluded chronic illness. Mental illness is commonly excluded, although some policies do allow for limited cover.

What does private medical insurance cover?

Private medical insurance is intended to cover the cost of in-patient or day-patient treatment in a private hospital or in a private ward within an NHS hospital, but out-patient treatment may be covered also. The level of cover and benefit varies directly in proportion to the level of premium you pay.

High-end comprehensive plans cover inpatient and outpatient treatment in all private hospitals, with the full cost paid for by the insurance company. At the upper end of the scale complementary and alternative healthcare and even dental care can be included, but this type of plan can be extremely expensive so most PMI policyholders opt for lower levels of cover. Lower level plans have fewer special benefits and may not cover the cost of out-patient treatment.

Insurance providers typically offer the policy holder a range of hospitals – choose among three levels: an A list without restriction, a B list (standard cover) that would exclude the most expensive private hospitals (the more expensive ones in London and some others will be excluded) and a C list limited to the least expensive hospitals. If a policyholder uses a hospital outside of the applicable list, the insurance company may have the right to refuse to pay out or to pay only part of the cost of treatment.

At the lowest levels, budget PMI plans may impose many kinds of restrictions, such as fixed limit maximum payments for various specified treatments or capping the total payable per annum and further exclusions of cover such as disallowing out-patient physiotherapy, further limiting the list of eligible hospitals or wards or only paying for treatment privately if the wait for NHS treatment is over six weeks.

How expensive is private medical insurance?

As with most things in life, you get what you pay for and it’s important to check the policy terms and conditions carefully because the small print will likely give you a foretaste of what you get in the event of a claim.

Costs vary directly in proportion to the level of benefits, the age of the policy holder and the likelihood of a claim relative to anticipated premium payments – the older your are, the more likely you are to need treatment, and the more insurance companies will expect you to pay in premiums.

Please also see: Can I afford private medical insurance?

Health Insurance Partners