The purpose of Private medical insurance is to pay for the treatment of acute conditions outside of the NHS. It does not cover the treatment of accidents or emergencies or for the treatment of any conditions deemed as chronic (although it will cover the costs of treatment up to the point of diagnosis of a chronic condition and ordinarily it will fund acute flare ups of a chronic condition).
An acute condition is defined as:
A disease, illness or injury that is likely to respond quickly to treatment which aims to return you to the state of health you were in immediately before suffering the disease, injury or illness, or which leads to your full recovery.
A chronic condition is defined as:
A disease, illness or injury that has one or more of the following characteristics:
- It needs ongoing or long-term monitoring through consultations, examinations, check-ups and/or tests.
- It needs ongoing or long-term control or relief of symptoms.
- It requires your rehabilitation or for you to be specially trained to cope with it.
- It has no known cure.
- It continues indefinitely.
- It comes back or is likely to come back.
Cancer is not classed as a chronic condition and all providers stipulate their full cancer cover separately within their policy literature.
By taking out private medical insurance it allows people more choices in hospitals, specialists and consultants. It enables people to arrange for treatment at a time convenient to them and is often much quicker than waiting for treatment on the NHS.
Private medical insurance policies can be taken out as individual or family cover, groups SME or corporate. Policies can be purchased for people living in the UK or for ex-pat communities all over the world. Some countries do have their own healthcare rules and cover is only available if sourced locally to that country. In general, International cover is available for purchase in the UK for the majority of countries/ regions.
Private Medical Insurance pays for in-patient, day-patient and out-patient treatment which must be referred by a GP in the first instance.
On most policies you have cover enhancement options such as adding dental or optical cover to the core product or increasing the cover for psychiatric treatment.
You can use other methods as cost containment options such as applying an excess to the policy, reducing the out-patients treatment to £1000 or removing cover for psychiatric care altogether.
Most policies available are flexible and can be tailored to suit the individual needs of all members.
Policies are often split into the following three levels:
- Comprehensive or Full refund
- Intermediate or Mid Range
- Budget or Core cover
Many of the providers also offer different hospital banding where the high charging hospitals will normally show on the highest band. Members should only go to hospitals within the list shown on their own membership.
There are many other products associated with private medical insurance such as Dental insurance, Health Screening, Occupational health, EAP’s and cash plans. They all offer different benefits and have values in their own right. Many groups and corporate schemes could have more than one product running alongside their private medical insurance policy.
When taking out PMI there are different underwriting methods.
Large group schemes can take MHD, medical history disregarded.
Group schemes and individual schemes can take FMU, full medical underwriting or MORI, moratorium underwriting. When switching insurer – members can also look at CPME, continued personal medical exclusions or CMORI, continued moratorium, therefore not losing any of their original underwriting.
Private medical insurance is an annual contract and cannot be cancelled mid-term. The insurer will issue renewal documents 6 to 8 weeks prior to renewal to allow the customer time to review the market options before making a decision about their renewal.
Private medical insurance claims are generally settled between the hospital and the insurer directly, it is essential that members obtain pre-authorisation from their insurer for any treatment to ensure that there are no shortfalls in payment. If there are shortfalls (i.e. the specialist or hospital charge over and above the agreed rates of the insurer and therefore they will only pay a percentage of the cost) the insured member would be liable to pay the difference and the hospital/ consultant will send an invoice for the shortfall amount.
Cash plan treatments are paid for by the member and then the original receipt is sent to the provider of the cash plan who will then pay the member.