What is private medical insurance?

Private Medical Insurance, also called PMI, pre-dates the founding of the National Health Service and is a sophisticated market place with a wide choice of policies on offer from a number of major insurance companies.

Private medical insurance is designed to cover the cost of private treatment in hospitals. PMI usually means a better level of treatment and also enables you to avoid or by-pass what may otherwise be a long wait for some treatments under the NHS.

What is excluded from private medical insurance cover?

Exactly what is excluded from your PMI policy will vary depending on level of cover and provider.

Typically, treatment for drug abuse or alcoholism, infertility treatment or standard pregnancy, HIV/AIDS and most cosmetic surgery are all excluded. Dental care is also usually excluded.

PMI policyholders

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.

The condition may be covered if after two full years without treatment have passed, 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 expensive. Lower level plans have fewer special benefits and may not cover the cost of out-patient treatment.

Hospital choice

Insurance providers typically offer the policy holder a range of hospitals, the more on offer such as the most expensive private hospitals will be reflected in a higher premium. 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.

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 so the more insurance companies will expect you to pay in premiums.