24 May The increasing cost of private medical insurance: and how a broker can save you money – Switch Health
The increasing cost of private medical insurance: and how a broker can save you money – Switch Health
Cost is a vital consideration when deciding whether to take out – or continue with – private medical insurance (PMI). As prices continue to rise well above the rate of inflation, how can you save money while maintaining the comprehensive cover you need?
These price hikes are due to the twin pressures of an ageing population and expensive new treatments, coupled with the fact that Insurance Premium Tax has risen from 6% to 10% since November 2015, and will rise again, to 12%, on 1 June 2017. These factors combined have led to an average annual increase in premiums of over £50 per person, according to ABI research. This, in turn, has resulted in a reduction in the number of individuals paying for PMI by one third since 1997.
But it’s not all bad news: there are plenty of ways to reduce your PMI premium without compromising your benefits or losing cover for pre-existing conditions. “So many people pay for optional extras on their plan that they simply don’t need,” says Mark Underwood from Switch Health. “An independent, specialist broker can access all PMI providers to find you the best cover for the best price.”
As well as saving you money, an expert broker will save you valuable time you would otherwise spend scouring the market for the best deal. What’s more, they’ll do this free of charge.
Many people see PMI as an affordable luxury, and are happy to rely on the inconvenience and long waiting times provided by an ever-stretched NHS. Unfortunately, the government seem intent on penalising the private healthcare sector, not appreciating the value it adds to the UK economy, as well as the support it provides to the NHS. Expert predictions of further increases in IPT to 20% by 2020 is just one example, while a lack of competition in the market allows some hospitals to charge astronomical fees.
It doesn’t help that treatment costs vary greatly across the country. For example, an MRI scan can cost over £1,000 more in some hospitals, while a hip replacement can range from £8,000 to £16,000, depending on your location. These variations have led many insurers to introduce postcode banding to their PMI policies, with central London being – perhaps predictably – the most expensive region. Unfortunately, customers who live in that area can find themselves being penalised on price, whether or not they need the most expensive hospitals.
In summary, the best way to avoid increasing premiums is to find a knowledgeable broker who will review things for you free of charge each year. New FCA regulations this month state that insurers and intermediaries are obliged to tell you there might be a better deal available – even if saving money requires shifting insurers. Appointing an expert broker means you’ll always be ahead of the market and in control of your costs.