How does Private Medical Insurance Work?

People seek medical insurance for many reasons, with the most common reason being to avoid NHS waiting lists or that they want the choice of when and where they want medical treatment. The advantages of PMI are simple: Faster treatment access, you choose the consultant and what hospital/facility the treatment is required.

Some people have a private medical insurance plan as part of their benefits package at work, or simply pay directly for treatment as and when required (this is often referred to as self-insure).

Before you can arrange private treatment, you will usually need a referral letter from your NHS GP, although it is becoming more common for insurers to integrate a Private GP option into the benefits of the plan.

Your doctor will recommend a specialist consultant or in most cases you can actively research and choose one yourself. The doctor will then write a private patient referral letter on your behalf.

If you have medical insurance, you should then check this referral is covered by your insurance policy and get an authorisation reference from them. The normal way to do this would be to call the insurer directly or follow any online claim journey if this is applicable.

An appointment time will then be arranged with your consultant, following which the consultant will write to your GP to update them on what they have found.

The consultant will then produce an invoice, which the insurance company settles apart from any excess on the policy that must be paid separately by you if this applies.

If inpatient treatment is required, admission is arranged to hospital, after which a follow-up appointment with the consultant will take place.

Again, the insurance company will settle all bills apart from any excess to be paid.

For those who self-insure, it is likely you will have to pay for treatment in full upfront, before you are admitted to hospital for any procedures. This can often be several thousand pounds, but a specialist PMI broker can offer low budget plans specifically to cover these big ticket items.

There are normally three main types of insurance policies around health insurance:

Private health insurance policies – you pay a monthly premium and they provide cover when you are ill. It is usually cheaper to join your work scheme than buy cover directly yourself. This is based on how the plans are rated, for example an individual/family plan would work on a No Claims Discount Basis, where individual claims made impact the price.

Hospital cash plans tend to have cheaper monthly premiums, but only pay out set amounts towards a stay in hospital and normally have certain criteria of actual conditions that are covered. For example, they may not cover Heart or Cancer related conditions.

Critical illness insurance pays out a single lump sum of cash if you are diagnosed with one of the specified conditions, for example cancer or a stroke.

All insurance policies tend to have general exclusions – illnesses and treatments they won’t cover. You would normally find these in the terms and conditions section of the provider booklet but can be explained by a specialist intermediary who can cut through all the jargon. General exclusions would usually be like any active involvement in war and riot, aids/HIV, chronic condition and cosmetic surgery to name a few.

Most private health insurance policies don’t cover patients for:

pre-existing conditions – any disease, illness or injury for which you have received medication, advice or treatment for in the past few years unless you are looking at a continuing underwriting option and can satisfy the switch criteria with the prospective insurer.

long-term illnesses that cannot be cured (pre-existing chronic conditions)

NHS services such as A&E and antenatal care for a normal pregnancy.

If you are interested in looking further into the benefits of private medical insurance, and how it would work best for you, then an independent intermediary will be able to provide a complete and independent, complimentary review of your healthcare options.

Matt Hall

Head of Field Sales

Switch Health

01242 371300