TL;DR
As an FCA-authorised broker that has arranged over 900,000 policies, we at WeCovr know that navigating the private medical insurance (PMI) market in the UK can feel complex. With household budgets under pressure, understanding how the cost of living crisis affects your health cover is more important than ever. How inflation is affecting premiums and what you can do about it The pinch on our wallets is undeniable.
Key takeaways
- Advanced Technology: New diagnostic tools like advanced MRI scanners and innovative surgical robots offer incredible benefits but come with a hefty price tag for purchase and maintenance.
- New Drugs and Treatments: Ground-breaking cancer drugs and gene therapies can be life-changing, but they are often exceptionally expensive. As these become approved for use, they are added to the list of treatments that insurers cover, pushing up the overall cost pool.
- Specialist Costs: The fees charged by private consultants, anaesthetists, and surgeons also increase over time.
- Action: Increasing your excess from £100 to £500, or even £1,000, can dramatically reduce your premium. It's a trade-off: you're taking on a little more risk in return for a lower upfront cost.
- Action: Ask about alternative hospital lists. If you don't live near London or are happy to be treated at a local selection of high-quality private hospitals, choosing a more restricted list can lead to significant savings.
As an FCA-authorised broker that has arranged over 900,000 policies, we at WeCovr know that navigating the private medical insurance (PMI) market in the UK can feel complex. With household budgets under pressure, understanding how the cost of living crisis affects your health cover is more important than ever.
How inflation is affecting premiums and what you can do about it
The pinch on our wallets is undeniable. From the weekly shop to the energy bill, prices are rising. It's no surprise, then, that private health insurance premiums are also feeling the effect. But this isn't just about general inflation; a specific and more potent force called 'medical inflation' is at play.
Understanding why your premium might be increasing is the first step. The second, and most crucial, is knowing the practical steps you can take to manage these costs without compromising on the quality of your care. This guide will walk you through both, giving you the clarity and confidence to make the best decision for your health and your finances.
Why Are Private Health Insurance Premiums Rising?
Several factors are converging to push up the cost of private medical insurance in the UK. It’s not just one thing, but a combination of economic pressures and changes within the healthcare sector itself.
1. General Inflation (Consumer Price Index - CPI)
The most straightforward factor is the general rate of inflation. The Office for National Statistics (ONS) tracks this with the Consumer Price Index (CPI). When the cost of goods and services in the economy rises, insurers' own operational costs increase. This includes everything from staff wages and office utilities to the basic supplies used in hospitals. These increased costs are inevitably passed on to customers through premiums.
2. Medical Inflation: The Bigger Driver
More significantly, 'medical inflation' consistently outpaces general inflation, often by a considerable margin. This is the rising cost of medical treatments, technologies, and medicines.
- Advanced Technology: New diagnostic tools like advanced MRI scanners and innovative surgical robots offer incredible benefits but come with a hefty price tag for purchase and maintenance.
- New Drugs and Treatments: Ground-breaking cancer drugs and gene therapies can be life-changing, but they are often exceptionally expensive. As these become approved for use, they are added to the list of treatments that insurers cover, pushing up the overall cost pool.
- Specialist Costs: The fees charged by private consultants, anaesthetists, and surgeons also increase over time.
In recent years, medical inflation has been running at rates approaching 8-10%, compared to a fluctuating CPI. This is the primary reason your renewal quote might seem higher than you expected.
3. Increased Demand and NHS Pressures
Record-high NHS waiting lists have led to a surge in people looking towards the private sector. According to NHS England data, the waiting list for routine hospital treatment remains stubbornly high, with millions of people waiting for care. This increased demand for private treatment naturally puts upward pressure on prices. With more claims being made, the risk pool for insurers expands, leading to premium adjustments to cover the higher payout levels.
4. Post-Pandemic Healthcare Needs
The pandemic created a backlog of non-urgent diagnostics and treatments. Many people delayed seeking help for conditions that have since worsened, requiring more complex and expensive care. Insurers are now seeing a higher volume and complexity of claims, which directly impacts the pricing models for the year ahead.
Understanding the Key Factors That Determine Your PMI Premium
Your premium isn't a one-size-fits-all figure. It’s a personalised price based on a range of risk and cover factors. Understanding these levers is key to finding ways to reduce your cost.
| Factor | How It Affects Your Premium |
|---|---|
| Age | This is the single biggest factor. The risk of needing medical treatment increases as we get older, so premiums rise accordingly. |
| Location | Your postcode matters. Medical costs, particularly for prestigious central London hospitals, are higher than in other parts of the UK. |
| Level of Cover | Do you want outpatient costs covered? What about mental health or therapies? A comprehensive policy costs more than a basic inpatient-only plan. |
| Excess | This is the amount you agree to pay towards a claim. A higher excess means a lower monthly or annual premium. |
| Hospital List | Insurers offer tiered lists. A policy covering all UK hospitals, including prime London ones, will be more expensive than one with a regional or selected list. |
| Underwriting | The method used to assess your medical history. 'Moratorium' is the most common, while 'Full Medical Underwriting' can sometimes be cheaper if you have a clean bill of health. |
| No Claims Discount | Similar to car insurance, you can build a discount for every year you don't make a claim, which can significantly reduce your renewal price. |
Let's be crystal clear on one vital point: Standard private medical insurance in the UK is designed to cover acute conditions that arise after you take out your policy. It does not cover pre-existing conditions (illnesses you already have) or chronic conditions (long-term illnesses like diabetes or asthma that require ongoing management rather than a cure).
10 Practical Strategies to Lower Your Private Health Insurance Costs
Feeling concerned about rising premiums? The good news is you have more control than you think. Here are ten effective strategies to make your private health cover more affordable.
1. Increase Your Policy Excess
An excess is the fixed amount you contribute towards the cost of your treatment when you make a claim. For example, if your excess is £250 and your claim is for £3,000, you pay the first £250 and your insurer pays the remaining £2,750.
- Action: Increasing your excess from £100 to £500, or even £1,000, can dramatically reduce your premium. It's a trade-off: you're taking on a little more risk in return for a lower upfront cost.
2. Review and Select Your Hospital List
Not all hospitals cost the same. Insurers group hospitals into bands or lists based on their costs. A policy that gives you access to every private hospital in the country will be the most expensive.
- Action: Ask about alternative hospital lists. If you don't live near London or are happy to be treated at a local selection of high-quality private hospitals, choosing a more restricted list can lead to significant savings.
3. Opt for a 'Guided' Treatment Option
Many top PMI providers now offer 'Guided' or 'Expert Select' options. With these, instead of choosing any specialist you wish, the insurer provides you with a shortlist of 2-3 vetted, high-quality consultants for your condition.
- Action: This option offers a "best of both worlds" scenario. You still get fast access to a top specialist, but because the insurer has pre-agreed rates with these consultants, your premium is lower.
4. Adjust Your Level of Cover
Comprehensive plans cover almost everything, from initial diagnosis (outpatient) to surgery (inpatient). However, you can tailor this.
- Action: Consider reducing your outpatient cover. You could set a limit (e.g., £1,000 per year) or remove it entirely and pay for initial consultations yourself. The bulk of the cost in healthcare comes from inpatient treatment (surgery and hospital stays), so keeping this core cover is what truly provides peace of mind.
5. Build and Protect Your No Claims Discount (NCD)
Just like with car insurance, a No Claims Discount rewards you for not using your policy. Discounts can reach as high as 60-75% over several years, making it a powerful tool for long-term affordability.
- Action: Think twice before claiming for minor expenses that you could afford to pay out-of-pocket. Paying for a single £300 consultation yourself might be smarter than making a claim and seeing your premium increase by more than that at renewal due to a lost NCD.
6. Add a 'Six-Week Wait' Option
This is one of the most popular cost-saving features. If the NHS can provide the inpatient treatment you need within six weeks of when it's required, you will use the NHS. If the NHS wait is longer than six weeks, your private policy kicks in.
- Action: Adding this option can reduce your premium by 20-30%. It provides a safety net against long NHS waits while keeping costs down. Given current waiting times, it's highly likely your policy would be triggered for most procedures.
7. Pay Annually
If your budget allows, paying for your policy in one annual lump sum is almost always cheaper than spreading the cost over 12 monthly direct debits. Insurers often add an administrative or credit charge for monthly payments.
- Action: When you get your quote, compare the annual and monthly prices to see the saving. It's often in the range of 5-10%.
8. Use Wellness Programmes and Added Benefits
Many leading insurers, like Vitality and Bupa, offer wellness programmes that reward you for healthy living. By tracking your activity, getting health checks, and eating well, you can earn discounts on your renewal premium, as well as other perks like coffee and cinema tickets.
- Action: Engage with your insurer's wellness app. As a WeCovr client, you also get complimentary access to our CalorieHero AI calorie tracking app to support your health goals. Furthermore, clients who purchase PMI or life insurance through us can receive discounts on other types of cover, like home or travel insurance.
9. Switch Insurers at Renewal
Loyalty rarely pays in the insurance market. Your renewal price from your current insurer is often not the most competitive price available. Another provider might be hungrier for your business and offer a better deal for equivalent cover.
- Action: Don't just auto-renew. This is where an expert PMI broker is invaluable. At WeCovr, we can conduct a full market review for you at no cost, comparing your renewal offer against the best PMI providers to see if you can get better value elsewhere.
10. Consider Your Underwriting Method
Most policies are sold on a 'Moratorium' basis, where conditions from the last five years are automatically excluded for a set period. 'Full Medical Underwriting' (FMU) involves declaring your full medical history upfront. If you have no recent health issues, an FMU policy can sometimes be cheaper. A broker can advise if this is a suitable path for you.
Is Private Medical Insurance Still Worth It During a Cost of Living Crisis?
This is the central question for many households. When budgets are tight, is PMI a luxury or a necessity? The answer depends on your priorities and your risk appetite.
Let's look at the facts. With NHS waiting lists for elective treatment at historic highs, having PMI means bypassing this queue. The median wait time for NHS treatment can be many months, whereas with private health cover, you could see a specialist and be scheduled for surgery within weeks.
Example Scenario: A Knee Replacement
- Without PMI: You see your GP for knee pain. You're referred to an NHS orthopaedic specialist, which could take several months. After diagnosis, you're added to the surgical waiting list, which could be over a year. During this time, your mobility is poor, you may be in pain, and unable to work or enjoy life fully.
- With PMI: You see your GP and get an open referral. You call your insurer, who approves a consultation with a private specialist within a week. An MRI scan is done a few days later. Surgery is scheduled for two weeks' time at a private hospital of your choice. You are back on your feet and in recovery while still on the NHS waiting list.
Here’s a balanced view of the pros and cons:
| Pros of Having PMI | Cons of Having PMI |
|---|---|
| Fast Access to Treatment: Bypass long NHS waiting lists for eligible conditions. | Cost: It's an additional monthly or annual expense for your household budget. |
| Choice and Control: Choose your specialist, hospital, and when you have your treatment. | Exclusions: Does not cover chronic or pre-existing conditions, A&E, or routine care. |
| Comfort and Privacy: Access to a private room, en-suite facilities, and more flexible visiting hours. | Premium Increases: Premiums rise with age and are subject to medical inflation. |
| Access to Advanced Treatments: Potential access to drugs or treatments not yet available on the NHS. | The 'Postcode Lottery': You might live in an area with shorter NHS waits, reducing the 'speed' benefit. |
| Peace of Mind: Knowing you have a plan in place if you or your family become unwell. | Complexity: Policies can be complex, and you need to understand what you're covered for. |
Ultimately, PMI is a value proposition. You are paying a premium to protect your health, your time, and your quality of life against the uncertainty of falling ill and facing long delays in treatment.
How WeCovr Can Help You Navigate the Market
In a complex market, expert guidance is priceless. As an independent and FCA-authorised PMI broker, WeCovr acts as your advocate. Our service is provided at no cost to you.
We are not tied to any single insurer. Our role is to understand your specific needs and budget, then search the whole market to find the policy that offers you the best possible value.
- Expert Comparison: We compare plans from all the leading UK private health cover providers, including Bupa, AXA Health, Aviva, and Vitality.
- Tailored Advice: We help you implement the cost-saving strategies listed above, finding the right balance between a manageable premium and comprehensive cover.
- Renewal Support: We don't just find your first policy. Every year, we'll proactively review your renewal to ensure you're still on the best deal, helping you switch if a better option exists.
- High Customer Satisfaction: Our clients consistently rate our service highly, trusting us to provide clear, unbiased advice that puts their interests first.
Frequently Asked Questions (FAQ)
Can I get private health insurance if I have a pre-existing condition?
Will my private medical insurance premium go up every year?
Is it cheaper to get a policy through a broker like WeCovr?
Take Control of Your Health and Your Budget
The cost of living crisis requires us all to be smarter with our money. But protecting your health remains one of the wisest investments you can make. With the right advice and a tailored policy, private medical insurance can be an affordable and powerful tool.
Let us help you find the right cover at the right price. Get a free, no-obligation quote from a WeCovr PMI expert today.
