How Does Private Health Insurance Work? Explanation for Everyone

Getting private health insurance is an option many UK residents consider. However, you need to get to know more about its specifics to set clear expectations of what can get out of it. In this article, we will cover the main aspects of private medical policies in the UK.

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What is Private Health Insurance for?

In contrast to government-run insurance programs, private medical insurance (PMI) in the UK refers to policies sold by private businesses. Private health insurance provides immediate access to high-quality treatment, making it a popular choice among individuals of all ages. Because the market is more competitive than ever, finding decent insurance within most budgets is quite straightforward.

If you become ill or injured during the policy’s term, it will cover private medical care, testing, and surgery. Policies are often used to treat acute, curable, and short-term illnesses. The premium is the amount you pay for your health insurance every month. If you require care that your insurance covers while your policy is current, your insurance may payout.

Its purpose is to give treatment in addition to the NHS’s services. Appointments with your doctor, for example, would still be made through the NHS. However, with a medical insurance policy, you may be able to obtain:

• Faster treatment.
• You have a say in where you get your treatment.
• More personal space
• A broader selection of treatment options

What does it cover?

Private health insurance covers certain sorts of diseases and their treatments. Many insurers offer choices to expand or decrease cover as required. The insurer will allow you to tailor your insurance to your requirements.

Acute & Chronic Medical Condition

Acute Condition

Acute pain is described as pain lasting for a brief period, having a known source, and having a predicted outcome. It generally appears suddenly, and it is often severe. An acute condition is a disease, sickness, or injury that is expected to react swiftly to treatment aimed at restoring your health to the state you had before the disease, illness, or injury.

For example, if you twist your knee and need surgery, your PMI will pay the cost of the treatment as long as no restrictions apply. This is intended to decrease or alleviate discomfort and return your knee to its pre-injury state.

Chronic Condition

Long-term treatment of ‘chronic conditions’ is usually not covered by your health insurance policy. These are diseases, illnesses, or injuries that exhibit one or more of the criteria listed below:

• Consultations, exams, check-ups, and tests are required on an ongoing or long-term basis.
• They necessitate continual or long-term symptom management or alleviation.
• They continue endlessly.
• They return or are likely to return.
• To deal with them, you need to be rehabilitated or specifically trained.
• There is no recognized treatment.

Asthma is an example of a chronic condition. Your PMI cover will not cover the daily management of asthma or other chronic diseases like osteoporosis or its emergency treatment.

While standard long-term treatment and tracking of diseases such as asthma would not be covered, sudden flare-ups of chronic conditions may be. This will be determined by your policy’s terms as well as your underwriting.

Inpatient-Only & Outpatient Cover

Inpatient-Only Cover

Any treatment that involves the use of a hospital bed overnight is covered under inpatient cover. This generally occurs after surgery, although it can also occur for minor treatments that need a hospital stay but can be completed on the same day.

The bulk of private health insurance policies provide inpatient care as standard.

The following is offered with inpatient cover:

• Charges for the operation as well as any drugs that may be required
• Charges paid to medical professionals such as surgeons, anaesthetists, and nurses
• Pre-surgery examinations
• Catering, as well as a private recuperation room and other medical amenities

Outpatient Cover

Blood tests, X-rays, MRIs, and CT scans are examples of diagnostic procedures that do not need a hospital bed for the night. Minor treatments such as wart removal and endoscopies are often covered as outpatient procedures by many providers.

The following levels are provided:

• Capped cover: Outpatient cover is limited, so you may have to pay for some diagnostics and tests yourself. MRI, CT, and PET scans are often covered in full.
• Capped cover with full diagnostics: Your insurance company may set a limit on the number of consultations it will pay for, but it will cover any diagnostic testing in full. Surprisingly, this choice is often cheaper than the preceding one, although the cover is larger.
• Full cover: Consultations and diagnostic testing are unrestricted. Because this is what most people claim for, it is the costliest choice.

What is not covered?

Mostly health insurance does not cover the following conditions:

• Chronic illnesses
• Elective treatment
• Emergency treatment
• Treatment for drug abuse
• Treatment abroad
• Care and treatment during pregnancy

How Much Does It Cost? Let’s See How Its Calculated

The cost of private health insurance is dependent on a variety of factors such as:

• Age: The older we get, the more likely we are to require medical treatment, hence the higher the cost of a cover.
• Smoking: If you smoke, you’re more likely to get sick, especially with a serious condition like cancer, which means you’ll spend more on insurance.
• Location: Your cover will be affected by where you reside in the UK; for example, if you live near costly hospitals, such as in Central London, you will pay more for your insurance.

You’ll also be able to pick from a variety of policy choices that will alter the way your Health Insurance rates are calculated:

• Hospital Network Access: The cost of your Health Insurance will be affected by the list of hospitals you are allowed to utilize, with more expensive hospitals resulting in higher rates.
• Outpatient Cover: Any treatment that does not need a bed is covered under outpatient cover. You can choose from complete outpatient cover, limited outpatient cover, or no outpatient cover at all.
• NHS Waiting List: Some insurers will provide this choice, which implies they will only pay for the treatment if the NHS waitlist for that treatment is greater than six weeks, reducing the probability of you filing a claim and, as a result, the cost of cover.
• Excess: This includes the additional sum of money you spend before the cover starts.
• Added features: Premiums will be higher if you add optional extras to your insurance, such as dental and optical cover.

How do you pay for private health insurance?

Private health insurance premiums work on a monthly basis. The cost depends on various factors, including age, geography, lifestyle, and cover.

Do private health insurance premiums change?

The cost of your private medical insurance premiums is highly likely to vary with time. This is because the policy is updated at the end of each year, and your rates will be adjusted to reflect your present conditions and those of your insurer. The following are some of the most common reasons why your health insurance rates may rise:

• Inflation in the medical industry
• Your advancing age
• You’re more likely to file a claim for costly treatments as a result of higher risk.
• Insurance Premium Tax (IPT) may increase.
• You have recently made a claim on your insurance.

How do private health insurance claims work?

If you require treatment while your insurance is valid, your insurer will pay on your behalf. You’ll have to file a claim for them to do so. The process goes as follows:

• Step 1: Your treatment will almost always begin with a recommendation from your primary care physician. Some Health Insurance policies allow you to bypass GP referrals for cancer or musculoskeletal problems. However, in most situations, an open GP referral from an NHS GP is required.
• Step 2: Make a claim with your insurer. You’ll obtain the contact information for their claims staff when you initially purchase your cover.
• Step 3: Provide your insurer with your policy number (available on your policy), as well as the information they need regarding your illness and your doctor’s referral.
• Step 4: If your claim is granted, either your insurer will refer you to a specialist, or you can search for one yourself using a recommendation.
• Step 5: Your insurer may give you documentation that the claim has been approved to bring to your appointment.
• Step 6: Schedule your appointments and begin your treatment.
• Step 7: After your treatment, your bill will be sent to your insurer, who will either pay the entire amount or their part of the expenses, less any excess you must pay.

Certain conditions would be considered as an exclusion, such as pre-existing and long term conditions. For instance, if you have already been confirmed mental health issue or chronic disease. Other common exclusions include dialysis, pregnancy, rehabilitation, childbirth, emergency care, etc.

How does medical underwriting impact how private health insurance works?

Determining the correct medical underwriting is crucial since it might affect your private health insurance’s exclusions. In a word, underwriting dictates how much of your medical history you’ll reveal to your insurer and how it will be used to choose limitations, so it’s critical to get expert guidance before making a decision.

Health insurance underwriting is further categorized into two types, namely, Moratorium Underwriting and Full Medical Underwriting.

How does moratorium insurance underwriting work?

Moratorium underwriting is a type of health insurance underwriting that excludes most pre-existing illnesses for a defined period. It includes the option to add them afterwards. A rolling moratorium is a kind of moratorium underwriting. It will generally exempt medical problems that occurred during the five years prior to your joining date; however, if you can go two years without receiving any treatment, guidance, symptoms, or prescriptions while on a cover, the insurance may cover you.

What is full medical underwriting?

Full medical underwriting requires you to complete a medical assessment form and reveal your entire medical history. Generally, regardless of when you last had treatment, all past serious conditions will be ruled out in the current underwriting. Your insurance will tell you which diseases and treatments they can cover. There is room for negotiation, especially for medical procedures that occurred many years back.

Summary

Private Medical Insurance is, therefore, a type of insurance that is meant to cover the costs of private medical treatment. It helps you to avoid lengthy NHS waiting periods and guarantees that you receive the best possible care as quickly as possible. Before you get a health insurance policy, you must grasp the basics, as explained above. The primary thing to understand about private health insurance cover is tailored to your specific needs. It’s usually based on your medical history, treatment choices, hospital access requirements, policy provider, and premium affordability.