Treat yourself to private healthcare
Growing waiting lists, healthcare rationing and strikes by junior doctors can make it feel like a very bad time to need medical treatment on the NHS. So knowing what private healthcare options are available could be a sensible strategy.
According to health charity The King’s Fund, the latest figures from the NHS show some serious signs of strain. Of the 3.5 million people on NHS waiting lists, more than 8% have been waiting longer than the government’s target of 18 weeks. This is the first time the government’s promise to ensure at least 92% of patients are treated within this timeframe has been breached since it was introduced in April 2012.
While it can be extremely inconvenient to have to wait for treatment, potentially preventing you working and enjoying life, there can be other reasons why people choose to go private. Dr Doug Wright, medical director at Aviva UK Health, explains: “The NHS does a great job but it has limited budgets and can’t provide all the treatment and drugs that people might want. This can often be the case with some of the new cancer drugs but there are plenty of examples of rationing across the NHS.”
Knowing you can access private treatment quickly and at a time and place that’s convenient to you can be hugely reassuring. Although there are costs attached to going private, there are several different ways to do this.
Take out private medical cover
One way is to take out a private medical insurance (PMI) policy. These cover you for private medical treatment including appointments with specialists, diagnostic tests, procedures and any drugs or follow- up treatment you might need such as physiotherapy or complementary therapy.
Some policies will also include extensive cancer cover, including drugs not readily available through the NHS, stem cell and bone marrow transplants and aftercare benefits such as help with the cost of wigs and external prostheses.
It’s also important to know what PMI doesn’t cover. As it’s designed to complement the NHS, you won’t get treatment for accident and emergency, maternity or chronic conditions such as diabetes and asthma. Insurers can also slap a ban on any pre-existing conditions you had before you took out cover with them.
Even with these gaps, having such extensive cover does come at a price. For example, a 35-year-old would pay £62.17 a month for a comprehensive plan from Aviva.
And these premiums increase as you get older as the probability that you’ll need treatment rises. For example, fast-forward Aviva’s premium to age 45, and it edges up to £79.71 a month and by age 55 it would be as much as £106.27.
As well as age-related increases, premiums also rise as a result of medical inflation. This is based on the cost and availability of medical treatment and drugs, and tends to be anything from 5% to 10% or more. “Premiums go up by a minimum of around 9% a year, with the increases getting steeper as you reach your 60s and 70s,” says Dr Penny O’Nions, principal of medical insurance specialist The Onion Group. “It can be much higher too. For instance, I once saw an annual increase of 75%.”
Drive down private costs
There are ways to make cover more affordable. Adding an excess, where you pay the first chunk of claims you make over the course of a year, can shave anything from 10% to 50% off your premium depending on the excess level. For example with a £500 excess, the price for an Axa PPP healthcare plan for a 45-year-old would fall from £107.33 a month to £76.78 – a saving of 28%.
A variation on this is WPA’s shared responsibility co-payment system. This is included on all its policies and means you pay a percentage of any claim – typically 25% – subject to an agreed annual maximum of up to £3,000. Charlie McEwan, corporate communications director at WPA, explains: “Your medical costs might never exceed a large excess, but with a co-payment you’ll always get a contribution from the insurer.”
Another common cost-containment method is a six-week wait. This might be suitable if long waiting lists are an issue because you’d be entitled to private treatment if you have to wait six weeks or more on the NHS. Using Axa’s £500 excess premium above, adding a six-week wait option would take the cost down to £59.76 a month.
Performing a spot of surgery on your private health insurance can also help cut costs, with outpatient benefits a common area to remove or limit. This takes out some of the lower-cost but potentially more frequent claims, such as consultations and tests, leaving you with cover for the more expensive operations involving a hospital stay. For example, tweaking Axa’s premium further by removing outpatient cover takes it down to £34.55 a month.
Dr O’Nions says that by using these cost-control mechanisms it’s easy to put an affordable PMI safety net in place without compromising on the treatment you’d get. She explains: “Start out with a smallish excess and build it up year after year, putting the money you’d need to pay it into an individual savings account (Isa). Once the excess gets to a four-figure amount, you could consider stripping out the outpatient benefits, leaving you with affordable cover for the really expensive treatment.”
Look for lower-cost options
Rather than tweak a standard policy to bring it in line with your budget, there are plenty of lower-cost options available from medical insurers. Carol Porter, head of commercial at specialist adviser The Health Insurance Group, says these can work well. “Benefits will usually be restricted in some way but as long as you understand what you’ve got, it will be much more affordable than comprehensive cover,” she explains.
Among the lower-cost plans are Exeter Family Friendly’s Health Essentials for Me, which provides cover for in-patient and day-patient surgery and treatment, but excludes diagnosis and consultations. A 45-year-old would pay £32.63 a month for this, compared to £73.37 for fully comprehensive cover.
Another variation comes from CS Healthcare, a friendly society catering for anyone who works or has worked for the civil service, public sector or a not-for- profit organisation. Its HealthBridge plan provides a range of benefits including consultations, surgery, physiotherapy and counselling, subject to a maximum of £15,000 a year.
Thanks in part to this limit, the key exclusions are treatment for heart problems and cancer. Russell Stephens, director of marketing at CS Healthcare, explains: “Our research found that people were happy with the service provided in these areas by the NHS, but were worried about waiting lists for some of the more routine operations. Most of these will be covered by the £15,000 limit,” he says.
Tightening up on the annual spend does shrink the premiums too. For instance, while a 50-year-old would pay around £130 a month for its comprehensive plan, this costs £53 a month.
You can also shrink your premiums by opting for a plan that targets one of the key health concerns: cancer. For example, Aviva offers a top-up plan, Cancer Essentials, giving £5,000 on diagnosis of cancer up to £100,000 towards non-NHS funded cancer drugs, plus access to nursing support online and by phone.
Consider a cash plan
A slightly different option is a healthcare cash plan. These allow you to claim back money for a range of healthcare costs such as a trip to the dentist, optician or physiotherapist. Although they don’t include cover for surgery, many plans will give you money towards specialist consultations, diagnostic tests and a stay in hospital.
Prices stack up well against PMI. As an example, Simplyhealth offers four levels of cover, starting at £11.88 a month for a plan including £150 of consultation cover and ranging up to £35.64 a month for a plan with £400 of consultation cover. In both cases, you’ll only be able to claim back 75% of the cost of consultations.
As well as being low cost, Mrs Porter says there’s a further pricing benefit. “Prices aren’t age-related, so even if you need to claim more you won’t pay extra when you’re older,” she says. “Although these plans have been around since the Victorian era, the providers regularly update them and the latest plans include benefits such as counselling and virtual GP services.”
The nature of the benefits means you could consider using a cash plan alongside a stripped-back inpatient- only PMI policy. The cash plan could pick up the tab for consultations and any physiotherapy needed to help recovery, while the PMI would deal with the big-ticket operations.
If you do intend to use a cash plan alongside PMI to contain costs, Paul Roberts, a director at specialist medical insurance adviser IHC, says you need to be on your toes. “It can be complicated and you’ll need to know exactly what’s covered where. It can work well, but many people forget to claim altogether,” he adds.
- Read more about PMI vs cash plans.
Pay as you go
Given the cost of PMI, especially when you get older, it’s also sensible to consider cutting out the insurer altogether by exploring self-pay options. Although the prospect of paying as you go might feel as if it would be outside your budget, it’s probably more affordable than you may think. For example, you’ll pay around £3,000 per eye for cataract surgery, £2,500 for a hernia repair and £3,500 for a knee arthroscopy.
While these are still chunky bills, they can stack up well against PMI premiums. For example it would only take 18 months for a 65-year- old paying £168 a month for WPA’s comprehensive cover to save up enough for a cataract operation.
One Moneywise reader told us that he'd rather save up £400 a month in a stocks and shares individual savings account (Isa).
It’s easy to access treatment too. Normally you’ll need a referral from your GP but some providers, including BMI Healthcare and Bupa on Demand, allow you to wrap a private GP appointment up into your treatment.
Once you know what treatment is required, you’ll be given a quote. Mrs Porter explains: “Some providers will bill you for the hospital and the consultant fees separately, but many now offer fixed- price deals. This is good as you’ll know up front exactly what the procedure will cost.”
For instance, Nuffield Health puts everything, including any aftercare, such as physiotherapy and follow-up consultations, into its price. It also promises that, even if there are complications, you won’t pay more than the price you’re given at outset.
Shop around when you self-pay
Even though it can seem a bit unnatural to start haggling over the price, there are ways to secure a better deal. “Shop around,” says Russell Stephens at CS Healthcare. “ Prices vary enormously, so it’s worth contacting a few hospitals to see what deals they can offer you.”
If you’re prepared to travel, you may also be able to bag a cheaper deal. For example, book in for a cataract in Nuffield’s Guildford hospital and you’ll pay £2,660. Go to its Oxford hospital and the price is £2,305.
If the prospect of haggling over the price of an arthroscopy or varicose vein surgery leaves you cold, you can call in the professionals to do this on your behalf. Bupa offers its Bupa on Demand service, which will search its recognised hospitals to find a consultant and deal that suits your needs.
You might also be able to make some savings when it comes to settling your bills, with many of the private healthcare providers offering payment plans to help spread the cost of treatment.
For example, BMI Healthcare offers a credit card that’s interest-free for the first 12 months and Nuffield Health can help you arrange a personal medical loan, which can be interest-free for up to 10 months.
It’s also important to note that you can flip between private and NHS treatment if you need as this could potentially allow you to strike a balance between costs and securing prompt treatment.
Dr Doug Wright at Aviva UK Health says that having a private consultation and any investigations to reach a diagnosis can work well. “It would cost around £150 for the consultation and possibly a few hundred pounds for the tests, but it would accelerate you to the point where you’d know what you’re dealing with,” he explains. “With this information, you can consider whether to pay for further treatment yourself or use the NHS.”
Private medical insurance
PMI allows you to skip the NHS waiting list and arrange treatment at a time you choose. With most PMI policies, you pay a monthly premium (the older you are, generally the higher premium) and the policy will then pay out, up to specified cover limits and after an agreed excess, for any treatment you might need. Not all conditions are covered by PMI and you get what you pay for: the more cover you want, the higher your premium will be.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.