TL;DR
As an FCA-authorised broker that has arranged over 900,000 policies, WeCovr understands that navigating the world of private medical insurance in the UK can be complex. This guide explains a key factor driving your premium: outpatient cover, and how choosing the right level can save you hundreds of pounds a year. How adding outpatient benefits increases premiums Adding outpatient cover to a private medical insurance (PMI) policy is one of the most significant factors that increases its cost.
Key takeaways
- Inpatient Care: This is when you are admitted to a hospital and require an overnight stay for treatment, perhaps for a hip replacement, heart surgery, or recovery from a major procedure. Your policy would cover the hospital room, specialist fees, nursing care, and the surgery itself.
- Day-patient Care: This involves being admitted to a hospital for a planned medical procedure or test but not staying overnight. Examples include a colonoscopy, cataract surgery, or other minor operations where you can go home the same day.
- Specialist Consultations: If your GP refers you to a specialist, such as a cardiologist, dermatologist, or orthopaedic surgeon, outpatient cover pays for the cost of these private consultations.
- Diagnostic Tests and Scans: This is a major component. It covers advanced imaging like MRI, CT, and PET scans, as well as blood tests, X-rays, and ultrasounds. These tests are essential for a swift and accurate diagnosis.
- Minor Procedures: Some minor treatments that can be performed in a consulting room, without needing a full hospital theatre, may be covered.
As an FCA-authorised broker that has arranged over 900,000 policies, WeCovr understands that navigating the world of private medical insurance in the UK can be complex. This guide explains a key factor driving your premium: outpatient cover, and how choosing the right level can save you hundreds of pounds a year.
How adding outpatient benefits increases premiums
Adding outpatient cover to a private medical insurance (PMI) policy is one of the most significant factors that increases its cost. The reason is simple: you are far more likely to use outpatient services than to be admitted to hospital for inpatient treatment.
Think of it like this: a basic policy is for the big, less frequent events, like surgery requiring a hospital stay. Outpatient cover is for the journey before that point—the consultations, tests, and scans needed to diagnose a problem. Because these services are used more often by more people, the insurer's risk and potential payout volume are much higher, which is directly reflected in your premium.
Understanding the Core of Private Health Insurance: Inpatient vs. Day-patient
Before we delve into outpatient cover, let's clarify what a standard, entry-level private medical insurance policy typically includes. At its heart, PMI is designed to cover the costs of treatment when you are admitted to a hospital.
This cover is usually split into two categories:
- Inpatient Care: This is when you are admitted to a hospital and require an overnight stay for treatment, perhaps for a hip replacement, heart surgery, or recovery from a major procedure. Your policy would cover the hospital room, specialist fees, nursing care, and the surgery itself.
- Day-patient Care: This involves being admitted to a hospital for a planned medical procedure or test but not staying overnight. Examples include a colonoscopy, cataract surgery, or other minor operations where you can go home the same day.
Crucially, standard UK private health insurance does not cover pre-existing conditions or chronic conditions. PMI is designed to treat new, acute medical conditions that arise after your policy has started. A chronic condition, like diabetes or asthma, is one that requires long-term management rather than a one-off cure and is managed by the NHS.
What is Outpatient Cover? A Detailed Explanation
Outpatient cover is an optional add-on that pays for the diagnostic stage of your healthcare journey—the steps taken to identify what's wrong before you are admitted to hospital. Without it, you would typically rely on the NHS for these initial stages.
Here’s what outpatient cover generally includes:
- Specialist Consultations: If your GP refers you to a specialist, such as a cardiologist, dermatologist, or orthopaedic surgeon, outpatient cover pays for the cost of these private consultations.
- Diagnostic Tests and Scans: This is a major component. It covers advanced imaging like MRI, CT, and PET scans, as well as blood tests, X-rays, and ultrasounds. These tests are essential for a swift and accurate diagnosis.
- Minor Procedures: Some minor treatments that can be performed in a consulting room, without needing a full hospital theatre, may be covered.
- Therapies: Cover for treatments like physiotherapy, osteopathy, and chiropractic care is often bundled within outpatient benefits, usually up to a set number of sessions.
Why Does Outpatient Cover Increase Premiums? The Cost Drivers
The link between outpatient cover and higher premiums is driven by frequency and cost. Let's break down the key reasons.
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Higher Utilisation Rates: People claim for outpatient services far more often than for inpatient stays. According to NHS England data, there were approximately 124.8 million outpatient appointments in 2022-23, compared to around 17.5 million inpatient admissions. This 7-to-1 ratio illustrates that the likelihood of an insurer having to pay for a diagnostic scan or consultation is vastly higher than for a major surgery.
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The High Cost of Diagnostics: Modern diagnostic technology is expensive. A single private MRI scan can cost anywhere from £400 to over £1,500 depending on the body part and location. CT scans are similarly priced. A policy with full outpatient cover means the insurer is on the hook for these potentially repeated costs for every new eligible condition.
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The "Diagnostic Journey": Diagnosing a health issue is rarely a single step. It might involve an initial consultation, followed by blood tests, then an ultrasound, and finally an MRI scan before a treatment plan is confirmed. Full outpatient cover funds this entire chain, with each step adding to the insurer's total cost.
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Specialist Fees (illustrative): The fees for a top consultant's time can be substantial, often ranging from £200 to £400 for an initial private consultation. A comprehensive policy covers these fees, adding another layer of cost.
Finding Your Balance: The Tiers of Outpatient Cover
The good news is that outpatient cover is not an all-or-nothing choice. Insurers offer different levels, allowing you to balance cost against coverage. This is where speaking to an expert broker like WeCovr can be invaluable, as we can help you find the perfect fit for your budget and needs.
Here are the typical options:
| Level of Outpatient Cover | What It Typically Includes | Who It's Good For | Impact on Premium |
|---|---|---|---|
| Full Outpatient Cover | Unlimited specialist consultations, diagnostic tests, scans, and therapies (subject to policy terms). | Those who want complete peace of mind and the fastest possible diagnostic pathway, without worrying about costs. | Highest |
| Capped Outpatient Cover | Cover for outpatient services up to a set monetary limit per policy year (e.g., £500, £1,000, or £1,500). | A great middle ground. Provides cover for the most likely diagnostic needs while keeping premiums manageable. The most popular choice in the UK. | Medium |
| Diagnostics-Only Cover | Covers diagnostic scans and tests (like MRI/CT) but not the initial specialist consultation fee. You pay for the consultation yourself. | A smart, cost-effective option for those happy to pay for the initial appointment to unlock access to rapid private diagnostics. | Low to Medium |
| No Outpatient Cover | No cover for any outpatient services. You use the NHS for all consultations and tests. You can only use your PMI once a specialist recommends inpatient or day-patient treatment. | Those on a tight budget who primarily want PMI as a safety net for major surgery, bypassing NHS treatment waiting lists. | Lowest |
Illustrative Cost Examples: How Outpatient Levels Affect Premiums
To show how these choices impact your wallet, let's look at some sample monthly premiums. The figures below are for illustrative purposes only for a 40-year-old non-smoker living outside London. Your actual quote will depend on numerous personal factors.
| Level of Outpatient Cover | Estimated Monthly Premium (Illustrative) | Key Feature |
|---|---|---|
| Full Outpatient Cover | £110 - £150 | No financial limits on eligible diagnostics or consultations. |
| £1,000 Outpatient Cap | £75 - £100 | Covers most common diagnostic journeys within a year. |
| £500 Outpatient Cap | £60 - £85 | Provides a solid safety net for initial tests or a few consultations. |
| No Outpatient Cover | £45 - £65 | Inpatient and day-patient cover only. |
As you can see, choosing a £1,000 outpatient cap instead of full cover could save you £35-£50 a month, or £420-£600 a year, while still providing substantial protection. (illustrative estimate)
Other Key Factors That Influence Your PMI Premium
While outpatient cover is a major driver, several other elements determine your final private medical insurance cost in the UK:
- Age: Premiums increase with age, as the statistical likelihood of needing medical treatment rises.
- Location: Treatment costs vary across the UK. Living in London or other major cities often results in higher premiums due to more expensive private hospitals.
- Excess (illustrative): This is the amount you agree to pay towards a claim. A higher excess (£500 or £1,000) will significantly lower your premium, whereas a £0 excess will increase it.
- Hospital List: Insurers offer different lists of approved hospitals. A comprehensive list including prime central London hospitals is more expensive than a regional or national list that excludes them.
- Underwriting:
- Moratorium: The insurer automatically excludes conditions you've had in the last 5 years. It's quicker to set up.
- Full Medical Underwriting: You declare your full medical history. It takes longer, but you have certainty from day one about what is and isn't covered.
- No Claims Discount: Similar to car insurance, you can build up a discount for every year you don't make a claim.
Is Outpatient Cover Worth It for You?
Deciding on the right level of cover is a personal choice. Here are some questions to ask yourself:
- What is my budget? Start with what you can comfortably afford each month. It's better to have a sustainable, lower-level policy than a comprehensive one you cancel after a year.
- How important is speed of diagnosis? The primary benefit of outpatient cover is bypassing NHS waiting times for tests and specialist appointments. As of mid-2024, the NHS England waiting list for consultant-led elective care stands at over 7.5 million treatment pathways. Getting a diagnosis in days rather than months can provide immense peace of mind and lead to faster treatment.
- Can I afford to self-fund diagnostics? If a £1,000 outpatient cap feels too expensive, could you afford to pay £300 for a consultation and £600 for an MRI scan out-of-pocket if needed? If so, a policy with no or limited outpatient cover might be a sensible risk.
- What are my wellness priorities? Many policies now include added benefits like virtual GP appointments, mental health support, and gym discounts. These can provide day-to-day value beyond just hospital cover.
Beyond the Core: Maximising Value from Your Health Insurance
Modern private health cover is evolving beyond just paying for treatment. Top providers and brokers focus on proactive health and wellbeing, offering tools to help you stay healthy in the first place.
This is a core part of our philosophy at WeCovr. When you arrange your health insurance through us, you not only get expert, impartial advice but also gain complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero. This tool can help you manage your diet, achieve fitness goals, and take control of your long-term health.
Furthermore, we believe in rewarding our clients. Customers who purchase private medical or life insurance through us are often eligible for discounts on other types of cover, helping you protect your family and finances more affordably.
How a PMI Broker Makes a Difference
Trying to compare every provider, every level of outpatient cover, and every hospital list on your own can be overwhelming. This is where an independent PMI broker is essential.
As an FCA-authorised broker, WeCovr works for you, not the insurance companies. Our service is provided at no cost to you. We:
- Listen to your needs and financial situation.
- Compare policies from across the UK's leading insurers.
- Explain the jargon in simple, clear terms.
- Help you find the optimal balance between cost and cover, ensuring you don't pay for benefits you don't need.
- Assist you with the application and support you for the life of your policy.
Our high customer satisfaction ratings are built on providing transparent, tailored advice that puts our clients' interests first.
Does private health insurance cover pre-existing conditions?
What is the difference between inpatient and outpatient cover?
How can I reduce the cost of my private medical insurance?
- Choose a higher excess: Agreeing to pay more towards the first part of a claim (e.g., £500) will reduce your monthly cost. (illustrative estimate)
- Limit your outpatient cover: Opting for a capped amount (e.g., £1,000) instead of full outpatient cover offers significant savings. (illustrative estimate)
- Select a guided hospital list: Choosing from a curated list of hospitals provided by your insurer is cheaper than having unrestricted access.
- Use a broker: An expert broker can compare the whole market to find the best value policy for your specific needs.
Choosing the right level of outpatient cover is the single biggest decision you can make to control the cost of your private health insurance. By understanding the options, you can secure valuable protection without overstretching your budget.
Ready to find the right balance for your needs? Get a free, no-obligation quote from a WeCovr expert today and discover how affordable peace of mind can be.
Sources
- Department for Transport (DfT): Road safety and transport statistics.
- DVLA / DVSA: UK vehicle and driving regulatory guidance.
- Association of British Insurers (ABI): Motor insurance market and claims publications.
- Financial Conduct Authority (FCA): Insurance conduct and consumer information guidance.
