TL;DR
As an FCA-authorised expert broker that has helped arrange over 900,000 policies, WeCovr understands that the cost of private medical insurance in the UK can be confusing. This guide demystifies the "hidden" fees, ensuring you know exactly what you're paying for and can avoid unexpected bills. WeCovr highlights admin, hospital and consultant fees When you buy private health insurance, the monthly premium is the headline figure.
Key takeaways
- Administrative and Tax Fees: Costs related to the policy itself, like Insurance Premium Tax (IPT).
- Hospital and Facility Shortfalls: When a hospital charges more than your insurer's maximum benefit for a room or procedure.
- Consultant and Specialist Shortfalls: When a specialist's fee exceeds the amount your policy will cover.
- Age: This is one of the most significant factors. As we get older, the statistical likelihood of needing medical treatment increases, so premiums rise accordingly.
- Location: Healthcare costs vary across the UK. Treatment in central London, for example, is typically more expensive than in other parts of the country. A policy that includes high-cost London hospitals will have a higher premium.
As an FCA-authorised expert broker that has helped arrange over 900,000 policies, WeCovr understands that the cost of private medical insurance in the UK can be confusing. This guide demystifies the "hidden" fees, ensuring you know exactly what you're paying for and can avoid unexpected bills.
WeCovr highlights admin, hospital and consultant fees
When you buy private health insurance, the monthly premium is the headline figure. However, the total cost of using your policy can sometimes be higher than you expect. This is rarely due to your insurer being deliberately misleading; it's more often a case of misunderstanding the policy's limits and structure.
The three most common areas where unexpected costs arise are:
- Administrative and Tax Fees: Costs related to the policy itself, like Insurance Premium Tax (IPT).
- Hospital and Facility Shortfalls: When a hospital charges more than your insurer's maximum benefit for a room or procedure.
- Consultant and Specialist Shortfalls: When a specialist's fee exceeds the amount your policy will cover.
Understanding these potential pitfalls is the first step towards making your health insurance work for you, without any nasty surprises.
Understanding Your Private Health Insurance Premium: What Are You Actually Paying For?
Your premium is the regular amount you pay to keep your private health cover active. Think of it as your membership fee for access to private healthcare. But what determines this fee? Insurers use several key factors to calculate your personal premium.
Key factors influencing your premium include:
- Age: This is one of the most significant factors. As we get older, the statistical likelihood of needing medical treatment increases, so premiums rise accordingly.
- Location: Healthcare costs vary across the UK. Treatment in central London, for example, is typically more expensive than in other parts of the country. A policy that includes high-cost London hospitals will have a higher premium.
- Health and Lifestyle: Your medical history and lifestyle choices, particularly smoking, have a direct impact. Smokers almost always pay more than non-smokers.
- Level of Cover: Policies range from basic (covering only in-patient treatment) to comprehensive (including out-patient consultations, therapies, and more). The more extensive the cover, the higher the premium.
- Policy Excess: This is the amount you agree to pay towards the cost of a claim. A higher excess leads to a lower premium, and vice-versa.
Here's a simplified example of how these factors can affect a monthly premium for a 40-year-old non-smoker:
| Factor | Option A (Lower Cost) | Option B (Higher Cost) | Estimated Monthly Premium Impact |
|---|---|---|---|
| Location | Excludes Central London | Includes Central London | +15-25% |
| Cover Level | In-patient only | Comprehensive (In & Out-patient) | +30-50% |
| Excess | £500 | £100 | +10-20% |
| Hospital List | Local / Limited Network | Nationwide / Premium Network | +10-20% |
As you can see, the choices you make when setting up your policy are the primary drivers of your core cost. A specialist PMI broker like WeCovr can help you balance these options to find a price point that suits your budget.
The Big Three "Hidden" Costs: A Detailed Breakdown
Beyond the premium, there are three areas where you might face additional costs if you're not careful. Let's break them down so you can avoid them.
1. Administrative and Policy Fees
These are costs built into the insurance system or charged for specific administrative actions.
- Insurance Premium Tax (IPT) (illustrative): This is a government tax on general insurance premiums, including private health insurance. As of 2025, the standard rate is 12%. This isn't a "hidden fee" from the insurer but is included in your final premium price. So, for every £100 of your base premium, £12 is tax.
- Policy Amendment Fees: Some insurers may charge a small administrative fee if you need to make a change to your policy mid-year, such as changing your address or adding a family member. This is typically in the range of £25-£50.
- Cancellation Fees: While you have a 14-day "cooling-off" period to cancel for free, cancelling mid-term after this period might incur a fee, especially if you have already made a claim during the policy year. Always check your policy's terms and conditions.
2. Hospital and Facility Shortfalls
This is one of the most common causes of unexpected bills. Most insurers provide cover through a "hospital network" or "hospital list".
What is a Hospital List? Insurers negotiate rates with specific hospital groups (like Nuffield Health, Spire Healthcare, or Circle Health Group) and individual private hospitals. These approved facilities form your hospital list. Policies often come with different tiers of hospital access:
- Local or Trust Network: A limited list of hospitals, often including local private wings of NHS Trust hospitals. This is the most budget-friendly option.
- Nationwide Network: A broad list of private hospitals across the UK, but may exclude the most expensive ones in central London. This is the most popular choice.
- Premium or London Upgrade: Includes the top-tier, high-cost hospitals in central London, such as The London Clinic or The Wellington Hospital. This carries the highest premium.
How a Shortfall Occurs: A shortfall happens when the hospital's charge is higher than the maximum amount your insurer has agreed to pay for that specific item or service.
- Example: Your policy covers a private room up to £500 per night. You choose a hospital where the private rooms are £650 per night. You would be responsible for paying the £150 per night difference.
- Real-Life Scenario: Sarah needed knee replacement surgery. She chose a prestigious hospital near her London office that was not on her insurer's "Nationwide" list. The total bill was £15,000. Because the hospital was "out-of-network," her insurer only paid their standard rate for the procedure, which was £11,000. Sarah was left with a £4,000 shortfall.
How to Avoid Hospital Shortfalls: Always confirm with your insurer before booking any treatment that your chosen hospital is on your approved list for the specific procedure you need.
3. Consultant and Specialist Fee Shortfalls
Similar to hospital networks, insurers also have agreements with thousands of consultants and specialists across the UK.
What is a "Fee-Assured" Consultant? A fee-assured consultant is a specialist who agrees not to charge more than the rates set by your insurance provider. When you use a fee-assured consultant, your insurer will cover their eligible fees in full (subject to your policy's overall limits).
How a Shortfall Occurs: Many of the UK's top, highly sought-after consultants are not "fee-assured". They set their own rates, which may be significantly higher than the insurer's guidelines. If you choose to see one of these consultants, you will have to pay the difference yourself.
- Example: You have a consultation with a leading cardiologist. Her fee is £450. Your insurer's maximum benefit for a first consultation is £300. You are responsible for the £150 shortfall.
- Real-Life Scenario: David was referred to a specific orthopaedic surgeon for a complex shoulder procedure. The surgeon's fee for the operation was £4,000. David's insurer, AXA Health, had a benefit limit of £3,200 for that procedure. David was informed of the £800 shortfall beforehand and agreed to pay it to secure the services of his preferred specialist.
How to Avoid Consultant Shortfalls: When your GP refers you to a specialist, call your insurer with the specialist's name. They can tell you instantly if they are fee-assured. If they are not, the insurer can provide you with a list of fully covered, fee-assured specialists in your area.
The Policy Excess: A Cost You Control (But Can Forget)
Your policy excess is a fixed amount you agree to contribute towards a claim. It's a key part of your policy design, not a hidden fee, but it's crucial to remember it when you come to make a claim.
- How it Works (illustrative): If you have an excess of £250 and your eligible medical bill is £3,000, you would pay the first £250, and your insurer would pay the remaining £2,750.
- Higher Excess = Lower Premium: Insurers reward you for sharing more of the risk. Opting for a higher excess is a popular way to make premiums more affordable.
A critical detail is whether your excess is per claim or per policy year.
- Per Policy Year: You only pay the excess once per year, regardless of how many separate claims you make. This is generally more favourable and is the standard for most leading providers.
- Per Claim: You must pay the excess for each new, unrelated condition you claim for.
| Excess Level | Estimated Monthly Premium (45-year-old, comprehensive cover) | Your Contribution on First Claim |
|---|---|---|
| £0 | £95 | £0 |
| £250 | £80 | £250 |
| £500 | £70 | £500 |
| £1,000 | £60 | £1,000 |
Top Tip: When you call to get pre-authorisation for treatment, always ask the insurer to remind you of your excess amount and how it will be applied.
What Standard Private Health Insurance Does NOT Cover
This is arguably the most important section to understand. UK private medical insurance is designed to cover acute conditions that arise after you take out your policy. It is not a replacement for the NHS, but rather a complementary service for eligible conditions.
There are two major categories of conditions that are almost never covered by standard PMI policies:
1. Chronic Conditions
A chronic condition is a long-term illness that can be managed but not cured. The NHS is responsible for the ongoing management of these conditions.
Examples of common chronic conditions not covered for ongoing care include:
- Diabetes
- Asthma
- Hypertension (high blood pressure)
- Crohn's disease
- Arthritis (the long-term management of it)
- Most types of dementia
While a PMI policy won't cover the day-to-day management of diabetes, it might cover the treatment of an acute condition that arises as a result of it, provided this is not specifically excluded in your policy terms.
2. Pre-existing Conditions
A pre-existing condition is any disease, illness, or injury for which you have experienced symptoms, received medication, or sought advice or treatment from a medical professional before the start of your policy.
Insurers handle pre-existing conditions in two main ways:
- Moratorium Underwriting: This is the most common method. Your policy automatically excludes any conditions you've had in the five years before joining. However, if you go for a continuous two-year period after your policy starts without any symptoms, treatment, or advice for that condition, it may become eligible for cover.
- Full Medical Underwriting (FMU): You complete a detailed health questionnaire when you apply. The insurer assesses your medical history and may place specific, permanent exclusions on your policy for any pre-existing conditions. This provides certainty from day one about what is and isn't covered.
Other Common Exclusions
Beyond chronic and pre-existing conditions, standard policies also typically exclude:
- A&E / Emergency services
- Routine pregnancy and childbirth
- Cosmetic surgery (unless required after an accident or eligible cancer surgery)
- Organ transplants
- Treatment for drug or alcohol addiction
- Uncomplicated self-inflicted injuries
- Routine GP services and prescriptions
How to Avoid Unexpected Costs: Your 5-Point Checklist
Navigating the world of private health insurance costs is straightforward if you follow a few golden rules.
- Get Pre-Authorisation for Everything: This is the most important rule. Before you book a consultation, scan, or any form of treatment, you must call your insurer to get a pre-authorisation code. They will confirm that the treatment is covered and that your chosen providers are approved.
- Use the Approved Network: When getting pre-authorisation, double-check that both the hospital and the consultant are on your insurer's approved list. Specifically ask, "Is Dr. Smith 'fee-assured' for this procedure?"
- Understand Your Excess: Know your excess amount and whether it is applied annually or per claim. This helps you budget for your contribution.
- Read Your Policy Documents: When you receive your policy documents, take 30 minutes to read the "Key Facts" and the schedule of benefits. Pay close attention to the financial limits and the main exclusions.
- Use an Expert Broker: A good broker does more than just sell you a policy. At WeCovr, our expert advisors help you understand the small print, compare the nuances of different insurers' hospital lists and benefit limits, and ensure you get the right cover from the start. Our service is free to you, as we are paid by the insurer.
Beyond Insurance: WeCovr's Commitment to Your Wellbeing
We believe that private medical insurance is one component of a holistic approach to health and wellness. While insurance provides peace of mind for when things go wrong, proactive health management can help prevent issues from arising in the first place.
This is why, at WeCovr, we go beyond just insurance. Our clients gain:
- Complimentary Access to CalorieHero: All our clients receive free access to our AI-powered calorie and nutrition tracking app, CalorieHero. A balanced diet is a cornerstone of good health, and our app makes it simple to monitor your intake and make healthier choices.
- Discounts on Other Protection: When you arrange your PMI or Life Insurance with us, you become eligible for exclusive discounts on other policies, such as income protection or critical illness cover, helping you build a comprehensive financial safety net for less.
A healthy lifestyle can also reduce your long-term health risks. Small, consistent efforts in diet, sleep, and activity can have a profound impact:
- Diet: Aim for a balanced diet rich in fruits, vegetables, and whole grains. Reducing processed foods and sugary drinks can lower your risk of developing chronic conditions.
- Sleep: Prioritise 7-9 hours of quality sleep per night. Good sleep is vital for immune function, mental clarity, and physical recovery.
- Activity: The NHS recommends at least 150 minutes of moderate-intensity activity a week. This could be a brisk 30-minute walk five days a week.
Comparing Private Medical Insurance UK Providers
The UK has a competitive PMI market with several excellent providers, each with its own strengths. Choosing the best PMI provider depends entirely on your personal needs and priorities.
| Provider | Key Feature / Focus Area | Best For... |
|---|---|---|
| Bupa | Extensive network, strong brand recognition, and a wide range of health services. | Those seeking a trusted, well-established provider with a huge choice of hospitals. |
| AXA Health | Strong focus on mental health support and comprehensive out-patient options. | Individuals and businesses wanting robust mental health cover and flexible policy options. |
| Aviva | "Aviva A-List" hospital network, often competitive on price, strong digital tools. | Price-conscious buyers who still want access to a quality nationwide hospital network. |
| Vitality | Unique wellness programme that rewards healthy living with discounts and perks. | Active individuals who want to be rewarded for staying healthy with lower premiums and other benefits. |
| The Exeter | Specialist in catering for older applicants and those with more complex medical histories. | Those over 60 or who have found it difficult to get cover elsewhere. |
This table is a simplified overview. The "best" policy is one that is tailored to you. This is where working with a broker like WeCovr is invaluable. We have deep knowledge of all these providers and can quickly match your specific requirements to the insurer best placed to meet them, saving you hours of research and potential confusion.
Will my private health insurance premium go up every year?
What is the difference between moratorium and full medical underwriting?
Does private health insurance cover dental and optical care?
Navigating the costs of private health insurance can feel complex, but with the right knowledge and expert guidance, it becomes simple. By understanding how premiums are calculated and where potential shortfalls can occur, you can use your policy with confidence.
Ready to find a policy that fits your needs and budget, with no hidden surprises?
Sources
- Office for National Statistics (ONS): Mortality, earnings, and household statistics.
- Financial Conduct Authority (FCA): Insurance and consumer protection guidance.
- Association of British Insurers (ABI): Life insurance and protection market publications.
- HMRC: Tax treatment guidance for relevant protection and benefits products.
