UK Private Health Insurance: Excess & Co-Payments

Your Essential Guide to Navigating Excess and Co-Payments for Predictable Healthcare Costs in the UK

UK Private Health Insurance: Your Guide to Excess & Co-Payments for Predictable Costs

In an increasingly complex healthcare landscape, private medical insurance (PMI) offers a vital alternative to the NHS, providing prompt access to specialist care, advanced treatments, and a choice of hospitals. However, the cost of comprehensive private health insurance can sometimes feel prohibitive. This is where understanding concepts like 'excess' and 'co-payments' becomes incredibly powerful.

For many, private health insurance isn't just about covering catastrophic, unforeseen illnesses; it's also about managing predictable healthcare costs – those routine consultations, diagnostic tests, or minor procedures that can often involve frustrating waits on the NHS. By strategically utilising excess and co-payments, you can significantly reduce your annual premiums, making private care more accessible for these anticipated needs, without compromising on the quality of cover for more serious conditions should they arise.

This comprehensive guide will demystify excess and co-payments, explaining how they work, their benefits, and how you can leverage them to tailor your private health insurance to your budget and specific healthcare expectations, particularly concerning predictable expenses.

The UK Healthcare Landscape and PMI's Role

The National Health Service (NHS) is a cornerstone of British society, providing universal healthcare free at the point of use. Its commitment is unwavering, but increasing demand, funding pressures, and workforce challenges often lead to extended waiting lists for diagnostics, specialist consultations, and elective surgeries.

This is where private medical insurance steps in, not as a replacement for the NHS, but as a complementary service. PMI offers:

• Faster Access: Reduced waiting times for consultations, diagnostics, and treatment.
• Choice: The ability to choose your specialist, hospital, and appointment times.
• Comfort: Private rooms, flexible visiting hours, and enhanced amenities during hospital stays.
• Specialised Treatments: Access to drugs and treatments that may not be immediately available or routinely funded on the NHS.

However, the peace of mind and convenience of private healthcare come at a cost. Insurance premiums are calculated based on various factors, including your age, postcode, chosen level of cover, and medical history. For many, finding a balance between comprehensive cover and affordability is key. This is precisely where excess and co-payments play a pivotal role.

Understanding the Core Concepts: Excess and Co-Payments

While often discussed together as ways to reduce premiums, excess and co-payments are distinct mechanisms. Understanding their differences is crucial for making an informed decision about your private health insurance policy.

What is an Excess in UK Private Health Insurance?

An 'excess' in private health insurance is a fixed, upfront amount that you agree to pay towards the cost of any claim you make before your insurer starts paying. It's similar to the excess you might have on your car insurance.

Think of it as your contribution to the initial portion of a claim. Once you've paid the agreed excess, your insurer then covers the remaining eligible costs up to the limits of your policy.

How it Reduces Premiums: Insurers offer lower premiums to policyholders who choose a higher excess because:

• Risk Sharing: You are taking on a greater portion of the initial financial risk.
• Reduced Administrative Costs: It discourages small, frequent claims, which can be costly for insurers to process. For example, if your excess is £250 and your claim is £200, you pay the full amount, and the insurer doesn't need to get involved.
• Discouraging Frivolous Claims: It encourages policyholders to be more mindful of when they make a claim, using the insurance for genuine needs rather than minor issues they could cover themselves.

Types of Excess:

The way an excess applies can vary significantly between policies and insurers. It's vital to check your policy terms carefully. The two most common types are:

1. Excess Per Condition / Per Claim: This is perhaps the most common. You pay the excess once for each new condition you claim for. So, if you claim for a knee injury in January and then for a shoulder issue in June, you would pay the excess twice (once for the knee, once for the shoulder). If the knee injury requires multiple follow-up appointments or treatments, you only pay the excess once for that condition, regardless of how many visits it takes.

   • Example: You have a £250 excess per condition. You develop carpal tunnel syndrome, requiring consultations, diagnostics, and a minor procedure. All costs related to this condition are covered by your insurer after you pay £250. Later in the year, you need investigations for persistent headaches. You will pay another £250 for this new condition.

2. Excess Per Policy Year / Per Annum: Less common, but offered by some insurers. With this type, you pay the excess only once in an entire policy year, regardless of how many different conditions you claim for. Once you've paid it, all subsequent eligible claims within that policy year are covered in full by your insurer (up to policy limits).

   • Example: You have a £500 excess per policy year. You pay £500 towards your first claim in March. For the rest of the policy year, any other claims you make (for different or new conditions) are covered by the insurer without you paying any further excess. This can be very cost-effective if you anticipate multiple, distinct claims within a year.

Common Excess Levels: Insurers typically offer a range of excess options, such as £100, £250, £500, £1,000, £2,500, or even more. Generally, the higher the excess you choose, the lower your annual premium will be.

What is a Co-Payment (or Co-insurance) in UK Private Health Insurance?

A 'co-payment', sometimes referred to as 'co-insurance', is a percentage of the total eligible claim cost that you agree to pay. Unlike an excess, which is a fixed amount, a co-payment is a variable amount tied directly to the cost of the treatment.

How it Works: With a co-payment, your insurer pays a percentage of the claim, and you pay the remaining percentage. For example, if you have a 20% co-payment, the insurer covers 80% of the costs, and you cover 20%.

Many policies with co-payments will also include an annual cap on the maximum amount of co-payment you would have to pay in a policy year. This cap protects you from potentially very high out-of-pocket expenses if you have extremely costly or multiple claims. Once you hit this cap, the insurer pays 100% of any further eligible costs for the remainder of the policy year.

How it Reduces Premiums: Similar to an excess, a co-payment reduces your premiums because:

• Shared Risk: You bear a continuous portion of the cost for every eligible claim.
• Cost Management: It incentivises policyholders to consider the cost of treatment, potentially opting for more cost-effective options when available (though your specialist will guide this).
• Incentivising Healthier Lifestyles: By having a financial stake in every claim, it subtly encourages preventative measures, though this is a less direct effect.

Example Scenarios for Co-Payment:

• Scenario 1 (No Cap): You have a 20% co-payment. A diagnostic scan costs £500. You pay £100 (20% of £500), and your insurer pays £400. If an outpatient consultation costs £200, you pay £40, and the insurer pays £160.
• Scenario 2 (With Cap): You have a 20% co-payment with an annual cap of £1,000.
  • Claim 1: Consultation and tests for £1,500. Your co-payment is £300 (20% of £1,500).
  • Claim 2: Minor procedure for £3,000. Your co-payment is £600 (20% of £3,000). Total co-payment so far: £300 + £600 = £900.
  • Claim 3: Further consultations for £800. Your co-payment would be £160 (20% of £800).
  • However, your total co-payment for the year would reach £900 + £100 (from the £160) = £1,000 (the annual cap). The remaining £60 of the co-payment for Claim 3, and any subsequent co-payments for the rest of the year, would be covered by your insurer.

Co-payments are less common in standard individual UK PMI policies compared to excesses, but they are a feature of some plans, particularly those that offer very low initial premiums or are designed for specific risk profiles. They are more prevalent in group schemes or international private medical insurance plans.

Excess vs. Co-Payment: A Clear Distinction

While both mechanisms serve to reduce your premium by requiring you to pay a portion of your healthcare costs, their application is fundamentally different.

When one might be preferred over the other:

• Choose Excess if: You prefer knowing the exact maximum you'll pay out-of-pocket for each new condition, irrespective of the total cost. This offers more financial predictability. It's often preferred if you anticipate needing potentially very expensive treatment, as your fixed contribution won't escalate with the overall cost.
• Choose Co-payment if: You are comfortable with a variable out-of-pocket cost that scales with the treatment, and potentially benefit from a lower initial premium across the board. The presence of an annual cap on co-payments can make this option attractive for managing maximum potential spend.

The Strategic Advantage: How Excess and Co-Payments Reduce Your Premiums

The primary and most compelling reason to consider an excess or co-payment is the direct reduction in your private health insurance premiums. This isn't just a minor discount; it can significantly alter the affordability of your policy, bringing comprehensive cover within reach for many more individuals and families.

Insurers' Perspective: Risk Sharing and Efficiency

From an insurer's standpoint, introducing an excess or co-payment is a strategic way to manage risk and operational costs:

• Shared Responsibility: When you take on a portion of the initial claim cost, you share the financial risk with the insurer. This reduced risk for the insurer translates directly into lower premiums for you.
• Reduced Administrative Burden: Processing very small claims can be disproportionately expensive for insurers. By having an excess (e.g., £250), many minor costs that fall below this threshold are covered by the policyholder directly, freeing up insurer resources and helping to keep overall premiums down for everyone.
• Moral Hazard Mitigation: It subtly encourages policyholders to be more mindful about seeking private care for very minor issues that could be handled differently, reserving the insurance for more significant needs.

Policyholder Benefit: Direct Premium Savings

For you, the policyholder, the benefit is tangible:

• Lower Monthly/Annual Costs: Opting for a higher excess is one of the most effective ways to immediately reduce your ongoing premium payments. This can be the difference between private health insurance being an option or remaining out of reach.
• Tailored Affordability: It allows you to tailor the cost of your policy to your personal financial situation and risk appetite. You can balance the immediate premium savings against the potential for out-of-pocket costs at the point of claim.
• Access to Better Cover: By making the premium more affordable, you might be able to afford a more comprehensive policy than you otherwise could, unlocking a wider range of benefits for when you truly need them. For example, instead of settling for a basic inpatient-only plan, a higher excess might enable you to afford a policy that includes outpatient benefits, which are crucial for predictable costs.

Focus on 'Predictable Costs'

This guide specifically highlights the application of excess and co-payments for 'predictable costs'. What does this mean?

Predictable costs are generally those healthcare needs that are not life-threatening emergencies but are often necessary and can be anticipated, such as:

• Outpatient Consultations: Seeing a specialist for an initial diagnosis or follow-up.
• Diagnostic Tests: X-rays, MRI scans, blood tests, or other investigations to determine a condition.
• Physiotherapy: A common need for musculoskeletal issues.
• Mental Health Therapy: Sessions with a psychologist or psychiatrist.
• Minor Elective Surgeries: Procedures like mole removal, endoscopy, or cataract surgery, where the costs are relatively contained and known in advance.

For these types of services, you might be prepared to pay a modest excess (e.g., £250 or £500) to gain immediate access to private care, bypassing NHS waiting lists. The premium saving you gain over the year by choosing this excess could far outweigh the excess itself, especially if you only make one or two claims.

Example of Premium Savings: While exact figures vary wildly by insurer, age, and postcode, consider a hypothetical scenario:

In this illustrative example, choosing a £500 excess could save you £450 per year on your premium. If you only make one claim within that year that costs, say, £2,000 (e.g., an MRI and specialist consultation), you would pay your £500 excess, and the insurer would pay £1,500. Your net outlay for that claim is £500, but you've saved £450 on your premium, effectively reducing the true "cost" of using your insurance to just £50 (excluding your actual premium payment). If you make no claims that year, you've saved the full £450.

This demonstrates how a carefully chosen excess can provide significant value, making private health insurance a more viable and attractive option for managing both routine and unexpected health needs.

Practical Application: Navigating Predictable Healthcare Costs

Now, let's explore how excess and co-payments work in real-life scenarios, focusing on those predictable healthcare costs that many individuals seek to cover privately.

Common Predictable Costs Where Excess/Co-Payments Apply:

Private health insurance is often used for:

• Outpatient Consultations: Seeing a consultant specialist (e.g., orthopaedic surgeon, dermatologist, neurologist) for diagnosis or follow-up. These can range from £150 to £350+ per session.
• Diagnostic Tests: Investigations such as MRI, CT scans, X-rays, ultrasounds, endoscopy, colonoscopy, or various blood tests. Costs can vary from a few hundred pounds to over a thousand for complex scans.
• Physiotherapy and Osteopathy: A course of treatment for musculoskeletal issues.
• Mental Health Support: Sessions with a therapist, counsellor, or psychiatrist for conditions like anxiety or depression.
• Minor Procedures: Small surgical procedures that don't require an overnight stay, such as mole removal, wart removal, joint injections, or cataract surgery (though the latter can be more involved).
• Prescription Drugs: While sometimes covered, often these have their own specific limits or may be subject to your excess/co-payment.

It's crucial to remember that private health insurance generally covers acute conditions – illnesses or injuries that are new, sudden, and expected to respond to treatment. It does not cover pre-existing conditions (those you had before taking out the policy) or chronic conditions (long-term, recurring conditions like diabetes, asthma, or hypertension). The insurance focuses on acute flare-ups or new diagnoses.

Scenario Examples: How Excess/Co-Payments Apply to Claims

Let's illustrate with some practical examples, assuming a policy with a £500 excess per condition or a 20% co-payment with a £1,000 annual cap.

Scenario 1: Outpatient Consultation with Excess

• Situation: You develop persistent knee pain. You decide to bypass the NHS waiting list and see a private orthopaedic consultant.
• Costs: Initial consultation (£250), MRI scan (£600), follow-up consultation (£200). Total cost for this condition: £1,050.
• With £500 Excess (per condition):
  1. You contact your insurer, get pre-authorisation for the consultation and MRI.
  2. You attend the consultation. The invoice is £250. This is less than your £500 excess, so you pay the full £250 out of pocket. Your remaining excess balance for this condition is now £250 (£500 - £250).
  3. You have the MRI scan. The invoice is £600. Your remaining excess is £250. You pay £250 towards the MRI. The insurer pays the remaining £350 (£600 - £250). Your excess for this condition is now fully paid.
  4. You have the follow-up consultation (£200). Since your excess for this condition is paid, the insurer covers the full £200.
• Your Total Out-of-Pocket for this condition: £250 (from consultation) + £250 (from MRI) = £500. The insurer pays the remaining £550.
• Benefit: You accessed quick diagnosis and treatment for your knee pain, paying a fixed £500 towards the specific condition, and your insurer covered the rest.

Scenario 2: Diagnostic Test with Co-Payment

• Situation: You experience unexplained abdominal discomfort and need a series of diagnostic tests.
• Costs: Specialist consultation (£300), endoscopy (£1,200), follow-up results consultation (£200). Total cost: £1,700.
• With 20% Co-Payment (£1,000 annual cap):
  1. You gain pre-authorisation from your insurer.
  2. Specialist Consultation: Total £300. You pay 20% = £60. Insurer pays £240. (Co-payment running total: £60)
  3. Endoscopy: Total £1,200. You pay 20% = £240. Insurer pays £960. (Co-payment running total: £60 + £240 = £300)
  4. Follow-up Consultation: Total £200. You pay 20% = £40. Insurer pays £160. (Co-payment running total: £300 + £40 = £340)
• Your Total Out-of-Pocket for this condition: £340. The insurer pays £1,360.
• Benefit: You received prompt diagnosis, and your costs were shared proportionally with the insurer, never exceeding your 20% agreement, and well within your annual cap.

Scenario 3: Minor Surgery with Both (Hybrid Policy - rare but illustrative)

• Situation: You need a minor skin lesion removal that requires a day-case procedure.
• Costs: Initial consultation (£200), Procedure (£1,500), Follow-up (£150). Total cost: £1,850.
• With £250 Excess (per condition) AND 10% Co-Payment (no cap for simplicity):
  • This is a less common hybrid but shows how they can combine. Some policies apply excess first, then co-payment to the remainder.
  • 1. The £250 excess is applied first. You pay £250. Remaining eligible cost: £1,850 - £250 = £1,600.
  • 2. Now, the 10% co-payment applies to the remaining £1,600. You pay 10% of £1,600 = £160. Insurer pays £1,440.
• Your Total Out-of-Pocket: £250 (excess) + £160 (co-payment) = £410. The insurer pays £1,440.

The Claims Process with Excess/Co-Payments:

The general process remains similar, with an extra step for your contribution:

1. Doctor's Referral: You typically need a referral from a GP (NHS or private) to see a specialist.
2. Contact Insurer for Pre-authorisation: Before any consultation or treatment, always contact your insurer. They will confirm if the condition is covered and pre-authorise the treatment plan and costs. This is when they will explain how your excess or co-payment will apply.
3. Payment Arrangement:
   • Direct Billing: Most commonly, the hospital or consultant will bill your insurer directly. You will then receive a separate invoice for your excess or co-payment, which you pay to the hospital/consultant.
   • Pay and Reclaim: Less common now, but sometimes you might pay the full amount yourself and then submit the invoice to your insurer for reimbursement (minus your excess/co-payment).
4. Treatment: You receive your private care.
5. Settlement: The insurer processes the claim, pays their portion, and ensures your contribution is collected.

Crucial Advice: Always pre-authorise. Without pre-authorisation, your insurer may refuse the claim, leaving you liable for the full cost.

Choosing the Right Level: Factors to Consider

Selecting the appropriate excess or co-payment level is a personal decision that requires careful consideration of your financial situation, health expectations, and risk tolerance.

Your Budget: Balancing Premium Savings with Potential Out-of-Pocket Costs

• How much can you comfortably afford to pay upfront if you need to make a claim? Don't choose an excess that would cause financial hardship. While a higher excess means lower premiums, it also means a larger lump sum payment if you claim.
• Consider your emergency fund. Ideally, any excess you choose should be covered by readily available savings, so you're not caught out unexpectedly.
• Annual Cost vs. Claim Cost: Work out the total annual premium saving for different excess levels. If you save £300 a year by choosing a £500 excess, but you expect to make a claim every other year, your average annual cost (premium + half an excess) might still be lower than a £0 excess policy.

Your Health History and Expected Needs

• Are you generally healthy and rarely visit the doctor? A higher excess might be suitable, as you're less likely to claim, and if you do, the premium saving will have significantly outweighed the excess.
• Do you anticipate needing frequent outpatient care (e.g., physiotherapy, specialist consultations for acute issues)? If so, a per-condition excess could mean paying it multiple times for different issues. In such cases, a per-annum excess (if available and affordable) or a lower excess might be more appealing, despite higher premiums.
• Remember the exclusion of pre-existing and chronic conditions. Your private health insurance will not cover conditions you already have, or long-term conditions like diabetes, asthma, or high blood pressure. These will continue to be managed by the NHS or funded privately outside of insurance. Your excess/co-payment calculations should not factor in managing these conditions.

Risk Tolerance

• Are you risk-averse? If the thought of a surprise out-of-pocket payment of £500 or £1,000 for an excess is unsettling, a lower excess or even a zero excess policy might provide greater peace of mind, even if it means a higher premium.
• Are you comfortable with a calculated risk? If you're generally healthy and value lower monthly outgoings, you might be happy to take the risk of a higher excess, knowing it will be offset by substantial premium savings over time.

Impact on Different Policy Types

• Comprehensive Policies: These typically cover inpatient, outpatient, diagnostics, and more. An excess applied here might cover a broader range of services.
• Inpatient-Only Policies: These are much cheaper as they only cover treatment requiring an overnight hospital stay. Outpatient consultations or diagnostics before admission would generally not be covered, so an excess would only apply if you're admitted.

Here's a table summarising the pros and cons of high vs. low excess/co-payment:

Beyond Excess and Co-Payments: Other Cost-Saving Strategies

While excess and co-payments are powerful tools, they are not the only way to tailor your private health insurance to your budget. Many insurers offer other options that can further reduce your premiums:

• NHS Six-Week Wait Option: Some policies allow you to use the NHS for your initial diagnosis and then switch to private treatment only if the NHS waiting list for your required procedure exceeds a certain time (e.g., six weeks). This can significantly reduce premiums as it offloads some of the diagnostic costs to the NHS, but still provides private care when queues become too long.
• Restricted Hospital Lists: Opting for a policy that limits your choice to a specific network of hospitals (often excluding the most expensive central London hospitals) can lower your premium. These lists still offer high-quality private facilities but at a lower cost to the insurer.
• 60% Outpatient Limit (or similar): Instead of unlimited outpatient cover, some policies cap the percentage of outpatient costs the insurer will pay (e.g., 60% or 80%), or limit the total amount for outpatient consultations or diagnostic tests per year. This means you cover a portion of these costs yourself, thereby reducing the premium.
• Reduced Cover Options / Modular Plans:
  • Inpatient-Only Cover: This is the most basic and cheapest form of PMI. It only covers treatment that requires an overnight stay in hospital. Outpatient consultations, tests, and therapies are not included unless specified as a bolt-on.
  • Core vs. Modules: Many insurers offer a 'core' inpatient plan, with optional 'modules' for outpatient cover, mental health, therapy, complementary medicine, etc. You can choose to add only the modules you need.
• No Claims Discount (NCD): Similar to car insurance, many PMI policies offer a No Claims Discount. Each year you don't make a claim, your NCD increases, leading to a discount on your renewal premium. Making a claim can reduce your NCD level, affecting future premiums. An excess can help protect your NCD, as minor claims falling below your excess level won't trigger a reduction.

By combining an appropriate excess level with one or more of these other cost-saving features, you can create a highly customised policy that fits your specific needs and budget, making private healthcare a sustainable option for managing your predictable health costs.

The Role of Your Broker: Simplifying Your Choice with WeCovr

Navigating the complexities of private health insurance – understanding policy wordings, comparing different insurer offerings, and selecting the right blend of benefits, excesses, and cost-saving options – can be a daunting task. This is where an expert, independent health insurance broker becomes an invaluable partner.

Why an Expert Broker is Essential:

• Impartial Advice: A good broker works for you, not for a single insurer. We have access to the entire market and can provide unbiased recommendations based on your unique circumstances.
• Market Knowledge: We understand the nuances of different policies, the small print, and how various features (like excess and co-payments) truly impact your cover and costs across different providers.
• Time-Saving: Instead of spending hours researching and comparing, a broker can quickly narrow down the best options for you.
• Expert Negotiation: While not always possible to negotiate premiums directly, brokers know which insurers are most competitive for specific profiles and can highlight deals or offers you might miss.
• Claims Support (sometimes): While not directly processing claims, many brokers offer guidance and support during the claims process, helping you understand what's covered and how to proceed.

How WeCovr Helps You:

At WeCovr, we pride ourselves on being your modern, user-friendly guide through the UK private health insurance market. Here's how we specifically help you find the best coverage, especially when considering factors like excess and co-payments:

• Independent Comparison: We compare policies from all major UK health insurers. This means you get a comprehensive view of the market, ensuring you don't miss out on a policy that perfectly fits your needs and budget. We provide you with tailored quotes from household names like Bupa, AXA Health, Vitality, Aviva, WPA, and many more.
• Demystifying Complexity: We explain complex policy terms – including the ins and outs of excess, co-payments, and other cost-saving measures – in clear, easy-to-understand language. We help you understand the real-world impact of your choices.
• Tailored Solutions: We take the time to understand your specific healthcare needs, your budget, your risk tolerance, and your preferences for predictable costs. Based on this, we recommend policies that are genuinely right for you, not just generic options. Whether you're looking for comprehensive cover with a high excess to keep premiums low, or a more basic plan with no excess for peace of mind, we can guide you.
• No Cost to You: Critically, our service comes at no additional cost to you. We are paid a commission directly by the insurer if you choose to take out a policy through us, meaning our impartial advice is freely available to you.

Choosing the right private health insurance policy is an investment in your health and peace of mind. Let us take the complexity out of the process, ensuring you get the most value for your money.

Important Considerations and Common Misconceptions

While private health insurance, especially with strategic use of excess and co-payments, offers significant benefits, it's crucial to be aware of some key aspects:

• Pre-existing and Chronic Conditions are Not Covered: This is arguably the most important point to understand. If you have a medical condition before you take out the policy (a pre-existing condition), it will almost certainly be excluded. Similarly, chronic conditions – those that are ongoing, recurring, or long-term (e.g., diabetes, asthma, arthritis, hypertension, Crohn's disease) – are typically excluded from private health insurance cover. The policy focuses on acute medical conditions that develop after your policy starts and are expected to be cured. Never assume or be led to believe that your existing or chronic conditions will be covered.
• Policy Wording is Key: Always, always read your policy document carefully. Every insurer has slightly different terms, definitions, exclusions, and rules for how excess and co-payments apply. What one insurer calls an 'excess per condition', another might call 'excess per claim', with subtle differences in application.
• Inflation and Healthcare Costs: Private healthcare costs, like all costs, are subject to inflation. This means your premiums are likely to increase year-on-year, even if you don't make a claim. Factors like your age and overall claims experience across the insurer's client base also contribute to renewal price changes.
• Geographical Limits: Most standard UK private health insurance policies cover treatment received within the UK. If you travel frequently, or wish to seek treatment abroad, you may need a separate international private medical insurance policy.
• Benefit Limits: Even with comprehensive cover, most policies have annual or lifetime limits for certain benefits (e.g., maximum for mental health, physiotherapy, or specific treatments). An excess or co-payment is applied before these limits are considered.
• Referrals: Almost all private health insurance policies require a GP referral to see a specialist. You cannot generally self-refer and expect your insurer to cover it.

Understanding these points will ensure you have realistic expectations of what your private health insurance policy can and cannot do for you.

Frequently Asked Questions (FAQs)

Here are some of the most common questions individuals have about excess and co-payments in UK private health insurance:

Q1: Does my excess apply per year or per claim? A: This depends entirely on your specific policy. Most common is 'per condition' (or 'per claim' for each new condition), meaning you pay the excess once for each separate medical issue you claim for. Some policies offer a 'per policy year' excess, which you only pay once, regardless of how many conditions you claim for in that year. Always check your policy wording.

Q2: Can I change my excess level mid-policy? A: Generally, no. Excess levels are usually fixed for the duration of your policy year. You can typically request to change it at your policy renewal date. Always contact your insurer or broker to discuss this.

Q3: What happens if my claim is less than my excess? A: If the total eligible cost of your claim is less than your chosen excess, you will pay the full amount yourself. The insurer will not pay anything, as your contribution covers the entire cost. For example, if your excess is £250 and your consultation costs £200, you pay the £200.

Q4: Are prescription drugs subject to excess/co-payment? A: It varies. Some policies cover prescription drugs fully, others have a separate specific limit, and some may require you to pay an excess or co-payment towards them, especially if they are part of a broader outpatient claim. Always check the 'Outpatient' section of your policy wording or specific drug benefit clauses.

Q5: Is there a maximum co-payment amount? A: Often, yes. Many policies that include a co-payment will also have an annual cap (e.g., £1,000 or £2,000). Once your total co-payments in a policy year reach this cap, the insurer will cover 100% of any further eligible costs for that year. This protects you from unlimited out-of-pocket expenses.

Q6: How does a No Claims Discount (NCD) work with an excess? A: An excess can help protect your NCD. If a claim's total eligible cost is less than your excess, and you pay the full amount yourself, this might not count as a 'claim' against your NCD, allowing it to continue to build. If the claim exceeds your excess, and the insurer pays their portion, this would typically be counted as a claim and could affect your NCD level at renewal.

Conclusion

Private health insurance, thoughtfully structured with an understanding of excess and co-payments, offers a powerful tool for taking control of your healthcare. It's not just for the unforeseen; it's a strategic choice for managing predictable costs, like specialist consultations, diagnostic tests, and therapies, ensuring you can access timely care without the burden of long waiting lists.

By choosing an excess or co-payment level that aligns with your budget and risk tolerance, you can unlock significant premium savings, making private healthcare a more accessible and sustainable option for you and your family. It empowers you to benefit from faster access, choice, and comfort, ensuring that when health concerns arise – especially those common, treatable conditions – you can address them promptly.

The complexities of comparing policies and understanding the nuances of how these cost-sharing mechanisms apply can be overwhelming. This is where an expert, independent broker like WeCovr becomes invaluable. We are here to guide you through the options from all major UK insurers, helping you tailor your policy to your exact needs at no additional cost to you.

Don't let the perceived cost deter you from exploring the benefits of private health insurance. With the right advice and a clear understanding of excess and co-payments, you can find a policy that delivers peace of mind and excellent value.

Take the first step towards smarter healthcare management today.