Is it actually worth buying private health coverage?
It was widely reported during the economic downturn that the number of UK private medical insurance renewals dipped by a few percent – and it’s not difficult to see what the policyholders’ rationale for the decision would have been: simple money saving. Perhaps unsurprisingly, the decrease in coverage was fairly similar between individual policyholders and group schemes.
It’s often said that doing things on the cheap nearly always ends up with more expense later – the classic “false economy” model. For instance, people who hold off on dental expenses due to the wider economic backdrop (and it seems that many did) may get away with not spending in the short term – but as anyone who has had dental caries knows, it won’t go away just because you ignore it. So the end result is more extensive (and expensive) work.
The type and amount of coverage you need will obviously depend on where you live – and there have been some interesting effects that are due to the recession in various places.
In Dubai, for instance, it became compulsory for foreign nationals to hold health insurance. All of which makes perfect sense, since health provision isn’t cheap – and with a massive expat population, the UAE would have a very (very) big strain on resources if it allowed uninsured people to freely become resident in the Emirates.
In the UK – where there is a mix of public and private health provision – visitors from other parts of the European Economic Area can access NHS health services in an emergency, but anyone from outside the EEA would need travel health cover.
Some things to think about if you’re considering buying private health insurance:
Will you be covered? The majority of private health insurance providers have limitations on what they cover, so they will look into your medical history and make a decision based on this. Ongoing treatment of chronic health conditions often isn’t covered either, so it’s worth checking with potential health insurance providers before you decide to invest.
Some private health plans have optional areas of cover. If you want to include dental insurance or mental health care, such as counselling, you may need to specifically include these areas in your plan.
As standard, the majority of private health insurance plans cover essential treatments, including surgery, consultations, nursing and hospital care, but exclude treatment for drug addiction and incurable conditions (see an example of this here) . There are generally two types of plans to choose from, known as fully underwritten and moratorium. Fully underwritten will require you to disclose your full medical history, whereas moratoriums simply impose blanket exclusions on pre-existing conditions going back a set number of years.
As well as the aforementioned limitations, there are other things that won’t be covered on either kind of plan. For example, private health insurance doesn’t replace essential NHS services such as trips to accident and emergency. You also won’t have unconstrained choice over where you are treated. You will have a list of hospitals to choose from, but depending on your level of cover the list could be either very broad or quite short.
Private health care isn’t for everyone, but if you have the income and you are in control of your finances it is a great way to gain peace of mind and control over the medical care you and your family will receive in the event of an accident or prolonged illness.