Healthcare Cash Plans vs Full PMI
As an FCA-authorised broker that has arranged over 900,000 policies, WeCovr helps thousands of UK residents navigate the world of private medical insurance. This guide demystifies the key differences between healthcare cash plans and full Private Medical Insurance (PMI), helping you make a more informed choice.
Martin Lewis often suggests cash plans for those wanting everyday dental, optical or physio cover. Cash plans can be a cost-effective way to cover routine medical costs for many. — Martin Lewis
The money-saving expert’s advice highlights a fundamental truth in the UK health insurance market: not all "health insurance" is the same. The product that's right for you depends entirely on what you want to cover.
Are you looking to budget for predictable, routine expenses like a dental check-up or new glasses? Or are you seeking peace of mind against the financial shock of a serious, unexpected illness requiring surgery?
- Healthcare Cash Plans are designed for the first scenario: managing and reclaiming costs for everyday healthcare.
- Private Medical Insurance (PMI) is designed for the second: covering the high costs of private treatment for acute medical conditions.
Understanding this core difference is the first step to choosing the right protection for you and your family. In this guide, we'll break down exactly what each product does, who it's for, and how they compare, so you can decide with confidence.
What is a Healthcare Cash Plan? A Closer Look
A healthcare cash plan is a simple and affordable insurance policy that helps you pay for routine healthcare costs. Think of it as a health savings account you pay into monthly, which then pays you back when you spend on eligible treatments.
The mechanism is straightforward:
- You pay a monthly premium, which can be as low as £5 and typically doesn't exceed £40.
- You attend a routine appointment (e.g., dentist, optician, physiotherapist) and pay for the service yourself.
- You submit the receipt to your cash plan provider.
- The provider reimburses you for the cost, up to the annual limit for that category of treatment.
These plans are not designed for major medical emergencies but for making predictable health spending more manageable.
What Do Cash Plans Typically Cover?
Cover varies between providers, but most plans offer reimbursement for a core set of everyday health expenses.
Common Healthcare Cash Plan Benefits:
| Benefit Category | Description | Typical Annual Limit |
|---|---|---|
| Dental | Covers check-ups, hygienist visits, fillings, and sometimes crowns or bridges. | £50 - £250 |
| Optical | Covers eye tests, plus a contribution towards glasses or contact lenses. | £50 - £200 |
| Physiotherapy | Includes sessions for sports injuries, back pain, or post-operative recovery. | £100 - £500 |
| Complementary Therapies | Often includes osteopathy, chiropractic, acupuncture, and sometimes podiatry. | £100 - £400 |
| Health Screenings | Contributions towards the cost of a private health check or 'MOT'. | £100 - £300 |
| Prescription Charges | Reimbursement for NHS prescription costs in England. | £20 - £100 |
| Hospital Stays | A fixed cash payment for each night you spend in an NHS hospital. | £25 - £100 per night |
Real-Life Example: Meet Susan, a 45-year-old graphic designer. She pays £18 per month for her healthcare cash plan.
- In April, she has a dental check-up and a filling, costing £110. She claims back £75 (her annual dental limit).
- In August, she gets an eye test (£25) and new glasses (£190), costing £215. She claims back £150 (her annual optical limit).
- Over the year, her plan costs her £216 (£18 x 12).
- She claims back a total of £225 (£75 + £150).
In this scenario, Susan is £9 in pocket and has effectively budgeted for her routine healthcare, avoiding two large lump-sum payments.
What is Full Private Medical Insurance (PMI)?
Private Medical Insurance (PMI), also known as private health cover, is a much more comprehensive type of insurance. Its purpose is not to cover routine costs but to pay for the diagnosis and treatment of acute medical conditions in private facilities.
An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery. It's the opposite of a chronic condition, which is a long-term illness that can be managed but not cured (like diabetes, asthma, or high blood pressure).
Crucial Information: Standard UK private medical insurance is designed for new, acute conditions that arise after your policy begins. It does not cover pre-existing conditions or the ongoing management of chronic conditions.
PMI gives you choice, speed, and comfort. It allows you to bypass potentially long NHS waiting lists for specialist consultations, diagnostic scans, and elective surgery.
What Does Private Medical Insurance Cover?
PMI policies are modular, meaning you can build a plan that suits your needs and budget. However, most policies are built around a core foundation.
Core PMI Cover (In-patient and Day-patient):
- Hospital Charges: Fees for your room, nursing care, and operating theatre costs.
- Specialist Fees: Charges from surgeons and anaesthetists.
- Diagnostic Tests: Scans and tests performed while you are admitted to hospital.
- Cancer Care: Comprehensive cover for chemotherapy, radiotherapy, and surgery is a cornerstone of most policies.
Optional Add-ons:
- Out-patient Cover: This is a vital add-on. It covers specialist consultations and diagnostic tests (like MRI, CT, and PET scans) that don't require a hospital admission. Without this, you would rely on the NHS for diagnosis before your PMI could be used for treatment.
- Mental Health Cover: Provides access to psychiatrists, psychologists, and therapy sessions.
- Therapies: Covers post-operative physiotherapy or osteopathy.
- Hospital List Choice: You can choose a policy with access to a nationwide list of hospitals or a more restricted (and cheaper) local list.
Real-Life Example: Meet Mark, a 52-year-old self-employed builder. He pays £75 per month for a comprehensive private medical insurance UK policy.
- He develops persistent hip pain and his GP suspects he needs a hip replacement. The NHS waiting time for this surgery in his area is over 12 months.
- His GP refers him to a private orthopaedic surgeon.
- His PMI policy covers:
- The initial consultation with the specialist.
- An MRI scan to confirm the diagnosis (£800).
- The full cost of the private hip replacement surgery (£13,500).
- His stay in a private hospital room.
- Six sessions of post-operative physiotherapy.
Mark is back at work within three months instead of potentially waiting over a year. For him, the value of PMI was in protecting his income and quality of life.
Head-to-Head: Healthcare Cash Plan vs. Private Medical Insurance
To make the choice clearer, let's compare the two products side-by-side across the most important features.
| Feature | Healthcare Cash Plan | Private Medical Insurance (PMI) |
|---|---|---|
| Primary Goal | Budgeting for routine, predictable costs. | Protection against large, unexpected medical bills for serious conditions. |
| How It Works | You pay for treatment, then claim the cash back (up to an annual limit). | The insurer pays the hospital and specialists directly (you may pay an excess). |
| Typical Cover | Dental, optical, physiotherapy, health screenings, prescriptions. | Surgery, cancer treatment, specialist consultations, diagnostic scans (MRI/CT). |
| Typical Monthly Cost | £5 - £40. Generally not based on age or medical history. | £40 - £150+. Based on age, location, smoking status, and level of cover. |
| Pre-existing Conditions | Usually covered, as it's for routine care. | Not covered (except on some specific corporate schemes or after a set period on a moratorium policy). |
| Chronic Conditions | Not covered. | Not covered. PMI is for acute conditions only. |
| Main Benefit | Makes everyday healthcare more affordable and manageable. | Speed of access to treatment, choice of specialist/hospital, and peace of mind. |
| Best For | Anyone who wears glasses, needs regular dental work, or uses therapies. | Anyone wanting to avoid long NHS waits for diagnosis and treatment of serious issues. |
Who Should Consider a Healthcare Cash Plan?
A cash plan is a fantastic, low-cost option for a wide range of people. You might find a cash plan is a perfect fit if you:
- Wear Glasses or Contact Lenses: The contribution towards a new pair of specs can often be more than the annual cost of the plan itself.
- Need Regular Dental Work: If you frequently need check-ups, hygienist visits, or the occasional filling, a cash plan helps smooth out these costs.
- Have a Young Family: Budgeting for children's dental care and eye tests becomes much easier. Some plans cover children for free or at a reduced rate.
- Are Physically Active: If you play sports or have a manual job, having access to a set number of physiotherapy or chiropractic sessions can be invaluable for dealing with niggling injuries.
- Are on a Tight Budget: If full PMI is currently out of reach, a cash plan offers a tangible health benefit for a very low monthly outlay. It's a great first step into health protection.
Who Should Consider Full Private Medical Insurance?
Full PMI is a more significant financial commitment, but it provides a much higher level of protection. You should seriously consider a PMI policy if you:
- Are Worried About NHS Waiting Lists: As of mid-2025, NHS England figures show millions of people are on waiting lists for consultant-led elective care. PMI is the primary way to bypass these queues for eligible conditions.
- Are Self-Employed or a Key Business Owner: Can your business survive if you are unable to work for 12-18 months while waiting for surgery? PMI can get you treated and back to work faster, protecting your income.
- Want a Choice in Your Care: PMI gives you more control over who treats you, which hospital you are treated in, and when the treatment takes place.
- Seek Peace of Mind Against Serious Illness: The comprehensive cancer cover included in most PMI policies is a major reason people choose this protection. It can provide access to drugs and treatments not yet available on the NHS.
- Value Privacy and Comfort: A private en-suite room can make a hospital stay a much more comfortable and restful experience.
The Hybrid Approach: Can You Have Both a Cash Plan and PMI?
Absolutely. In fact, for those who can afford it, having both a cash plan and a PMI policy creates the ultimate health protection package.
- Your PMI acts as your safety net for the big, scary, and expensive health events like a cancer diagnosis or the need for joint replacement surgery.
- Your Cash Plan works in the background, handling all the small, routine costs throughout the year, like dental fees and new glasses.
This strategy allows you to keep the cost of your PMI down. For instance, you could choose a PMI policy with a higher excess or one that excludes routine therapies, knowing that your separate cash plan will cover those elements.
Navigating these combinations can be complex. This is where an expert PMI broker like WeCovr provides immense value. We can analyse your specific needs and budget to find the most cost-effective blend of cover, whether it's a combined policy from a single insurer or two separate plans from different providers.
Understanding the Costs: What Influences Your Premiums?
The pricing models for cash plans and PMI are completely different.
Healthcare Cash Plan Pricing
Cash plan premiums are simple. They are based on the level of cover you choose, not on your personal circumstances. A 25-year-old will pay the same as a 65-year-old for the same plan. This makes them accessible and predictable.
Private Medical Insurance Pricing
PMI premiums are highly personalised and are calculated based on several risk factors:
- Age: This is the single biggest factor. The risk of illness increases with age, so premiums rise accordingly.
- Location: Treatment costs vary across the UK. Living in Central London, for example, will result in higher premiums than living in a more rural area.
- Level of Cover: A comprehensive plan with unlimited out-patient cover and a top-tier London hospital list will cost significantly more than a basic plan with limited cover.
- Excess: This is the amount you agree to pay towards a claim. A higher excess (e.g., £500) will lower your monthly premium.
- Underwriting: The method used to assess your medical history. 'Moratorium' underwriting is most common, where conditions from the last 5 years are excluded for an initial 2-year period.
- No Claims Discount: Similar to car insurance, you can build up a discount for every year you don't claim, which can help offset age-related price increases.
An independent broker can model all these variables for you, finding the sweet spot between comprehensive cover and an affordable premium.
Proactive Health: A Wise Investment
While insurance is crucial for when things go wrong, the best strategy is always to stay as healthy as possible. Modern insurers recognise this and increasingly build wellness benefits into their products.
- Diet: A balanced diet rich in fruits, vegetables, and whole grains is fundamental to good health. As a WeCovr client, you get complimentary access to our AI-powered nutrition app, CalorieHero, to help you track your intake and make healthier choices.
- Exercise: The NHS recommends at least 150 minutes of moderate-intensity activity a week. This can be anything from a brisk walk to cycling or swimming.
- Sleep: Aim for 7-9 hours of quality sleep per night. Poor sleep is linked to a host of health problems, from a weakened immune system to an increased risk of chronic disease.
Many of the best PMI providers now offer discounts on gym memberships, fitness trackers, and even healthy food, rewarding you for taking care of yourself.
How WeCovr Can Help You Choose
The UK private health cover market is complex, with dozens of providers and hundreds of policy combinations. Trying to compare them all yourself can be overwhelming.
As a leading, FCA-authorised insurance broker, WeCovr simplifies this process for you at no extra cost.
- Expert, Unbiased Advice: We are not tied to any single insurer. Our loyalty is to you, our client. We listen to your needs and find the policy that truly fits.
- Market-Wide Comparison: We have access to plans from all the major UK insurers, including many that aren't available on comparison websites.
- Exclusive Benefits: When you arrange your PMI or Life Insurance through us, you not only get our expert service but also receive discounts on other types of cover and complimentary access to our CalorieHero wellness app.
- Trusted by Customers: Our high customer satisfaction ratings are a testament to our commitment to providing clear, helpful, and friendly service.
We do the hard work of comparing the market, explaining the jargon, and helping you complete the paperwork, ensuring you get the right protection at the best possible price.
Are pre-existing conditions ever covered by Private Medical Insurance?
Do I need a GP referral to use a healthcare cash plan or PMI?
Will my PMI premium go up if I make a claim?
Can I have just an out-patient PMI policy?
Ready to explore your options? Whether you're leaning towards a simple cash plan, comprehensive PMI, or a combination of both, our expert team is here to help.
Related guides
Why private medical insurance and how does it work?
What is Private Medical Insurance?
Private medical insurance (PMI) is a type of health insurance that provides access to private healthcare services in the UK. It covers the cost of private medical treatment, allowing you to bypass NHS waiting lists and receive faster, more convenient care.How does it work?
Private medical insurance works by paying for your private healthcare costs. When you need treatment, you can choose to go private and your insurance will cover the costs, subject to your policy terms and conditions. This can include:• Private consultations with specialists
• Private hospital treatment and surgery
• Diagnostic tests and scans
• Physiotherapy and rehabilitation
• Mental health treatment
Your premium depends on factors like your age, health, occupation, and the level of cover you choose. Most policies offer different levels of cover, from basic to comprehensive, allowing you to tailor the policy to your needs and budget.
Questions to ask yourself regarding private medical insurance
Just ask yourself:👉 Are you concerned about NHS waiting times for treatment?
👉 Would you prefer to choose your own consultant and hospital?
👉 Do you want faster access to diagnostic tests and scans?
👉 Would you like private hospital accommodation and better food?
👉 Do you want to avoid the stress of NHS waiting lists?
Many people don't realise that private medical insurance is more affordable than they think, especially when you consider the value of faster treatment and better facilities. A great insurance policy can provide peace of mind and ensure you receive the care you need when you need it.
Benefits offered by private medical insurance
Private medical insurance provides numerous benefits that can significantly improve your healthcare experience and outcomes:Faster Access to Treatment
One of the biggest advantages is avoiding NHS waiting lists. While the NHS provides excellent care, waiting times can be lengthy. With private medical insurance, you can often receive treatment within days or weeks rather than months.
Choice of Consultant and Hospital
You can choose your preferred consultant and hospital, giving you more control over your healthcare journey. This is particularly important for complex treatments where you want a specific specialist.
Better Facilities and Accommodation
Private hospitals typically offer superior facilities, including private rooms, better food, and more comfortable surroundings. This can make your recovery more pleasant and potentially faster.
Advanced Treatments
Private medical insurance often covers treatments and medications not available on the NHS, giving you access to the latest medical advances and technologies.
Mental Health Support
Many policies include comprehensive mental health coverage, providing faster access to therapy and psychiatric care when needed.
Tax Benefits for Business Owners
If you're self-employed or a business owner, private medical insurance premiums can be tax-deductible, making it a cost-effective way to protect your health and your business.
Peace of Mind
Knowing you have access to private healthcare when you need it provides invaluable peace of mind, especially for those with ongoing health conditions or concerns about NHS capacity.
Private medical insurance is particularly valuable for those who want to take control of their healthcare journey and ensure they receive the best possible treatment when they need it most.
Important Fact!
We can look at a more suitable option mid-term!
Why is it important to get private medical insurance early?
👉 Many people are very thankful that they had their private medical insurance cover in place before running into some serious health issues. Private medical insurance is as important as life insurance for protecting your family's finances.👉 We insure our cars, houses, and even our phones! Yet our health is the most precious thing we have.
Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy private medical insurance can be made much simpler with the help of FCA-authorised advisers. They are the specialists who do the searching and analysis helping people choose between various types of private medical insurance policies available in the market, including different levels of cover and policy types most suitable to the client's individual circumstances.
It certainly won't do any harm if you speak with one of our experienced insurance experts who are passionate about advising people on financial matters related to private medical insurance and are keen to provide you with a free consultation.
You can discuss with them in detail what affordable private medical insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.
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