What is Private Medical Insurance

Private medical insurance is designed to cover the cost of private medical treatment for curable short-term illness or injury (commonly known as acute conditions). These costs can include operations, consultations, diagnostic investigations and procedures such as blood tests and scans for example.

Private Medical Insurance must not be seen as a complete substitute for the National Health Service (NHS). The purchase of PMI provides peace of mind in the knowledge that medical treatment can be obtained promptly for an eligible condition. The purchase of PMI does not mean that superior treatment is being obtained outside the NHS.

Often, PMI cover allows for patients to choose which hospital they are treated in, when their treatment takes place and which specialists they see. Private hospitals may also offer more comfortable accommodation to patients, who are likely to be housed individually in private rooms.

In addition, most Health Insurance policies allow access to the country's leading health specialists and to expensive new medications (such as the cancer drug Herceptin) which are not available on the NHS.
If you begin to feel unwell, the first port-of-call is normally your G.P. If they feel that further diagnosis or treatment is needed, there are three basic levels of care which are relevant to private medical insurance, known as In-, Out- and Day-Patient..

Out-Patient: Having been referred by their G.P, the patient visits a specialist or consultant, who will try to diagnose or treat them prior to their being admitted to hospital.

Day-Patient:  Sometimes referred to as a day-care or day-case, It is when you go into hospital for a few hours usually using a bed, perhaps to receive treatment or undergo diagnostic tests, but do not require to stay in the hospital overnight.

In-Patient: This when you go into hospital for treatment or investigations and require to stay in for one night or more.

This is how the treatment process works:

• Go to your GP.
• Your GP recommends you see a specialist.
• Out-patient consultations with a specialist who may recommend further tests.
• Your specialist recommends either in-patient or day-patient treatment.
• Your specialist helps you to arrange hospital treatment.
• If you have private medical insurance your GP can arrange for you to see a specialist privately.
• If tests are needed these can be arranged promptly.
• If you need treatment, it can be arranged promptly.
• You may be treated in the comfort of a private hospital or in an NHS hospital, as a private patient, at a time to suit you.

There is a large variety of schemes available - from low-cost schemes, offering limited cover, to those which offer wide - ranging cover and benefits. Most schemes offer cover for in-patients care, but not always out patient.

The most comprehensive policies will cover out-patient treatment in full. However, you can reduce the cost of a policy by choosing to to limit out-patient specialist consultations, or by excluding certain diagnostic tests.

You will need to decide what sort of cover you want. There are a number of things you will have to consider, here are just two examples:

• Do you want your cover to include seeing a specialist as an out-patient?
• Do you want a choice of hospitals, or would you be satisfied to receive any treatment that you might need in a hospital available from a limited range chosen by your insurance company?

The answers you give to questions such as these could have a significant effect on the premium that you pay (please see section 6 ).

What am I covered for? What does my cover not include?
Remember, private medical insurance is designed to cover treatment for curable, short-term illness or injury (commonly known as acute conditions). Some illnesses and treatments are never covered and these are common to the most schemes.

Usually included:

• Cover for treatment of short-term (acute) medical conditions
• In-patient tests
• Surgery
• Hospital accommodation and nursing

Sometimes Included:

• Out patient consultations with a specialist
• Overseas cover
• Cash payment for treatment received as an NHS in-patient

Usually not included:

• Conditions you had before taking out the insurance (commonly known as chronic conditions - see Section 7 )
• GP services
• Cover for long-term illnesses, which cannot be cured (Usually referred to as chronic conditions)
• Accident and emergency admission

General Exclusions for PMI Cover:
PMI is designed to work in tandem with the NHS. It therefore follows that there are certain exclusions common to most policies. These are usually as follows:

• Chronic Conditions
• AIDS
• Alcholism, Drug Abuse and Substance Abuse / Self-Inflicted Injury
• Cosmetic Treatment
• Out-patient Drugs & Dressings
• Dentistry (other than specified oro-surgical procedures)
• Certain pre-existing conditions existing before the policy commences
• Routine pregnancy / Sterilisation / Infertility / Terminiation of Pregnancy
• War Risks
• Kidney Dialysis
• Surgical or Mobility Aids, Spectacles, Contact Lenses and Hearing Aids

This list is not exhaustive and exclusions on policies should be checked carefully before inception.

What will affect my premiums?
Whichever scheme you choose, it is likely that your premiums will rise above the rate of general inflation. This is because of factors, which affect how healthcare is provided in all western economies.

Each year more people claim on their insurance cover for private medical treatment. A hip replacement costs around £6,000 and is common procedure, particularly for older patients.

The number of treatments to improve quality of life is increasing steadily. Most private medical insurance policies aim to improve quality of life is increasing steadily. Most private medical insurance policies aim to cover these treatments as they become established medical practice and available privately.

Likewise, the sophistication and complexity of tests used to diagnose illness and injury is also increasing. Such tests are becoming far more widely available in private hospitals - for example, Magnetic Resonance Imaging (MRI) scans which cost around £500 each.

As people get older they are more likely to need and receive medical treatment, which means that private medical insurance premiums will usually increase with that age to reflect this.

Your choice of cover will affect what you Pay:
Paying an excess (in other words the first part of a claim) yourself.
Choosing a different grade of hospital accommodation.
Paying for part of your treatment (for example an out-patient consultation with a specialist).
Receiving treatment under the NHS when it is available within 6 to 12 weeks.
Choosing to receive treatment at the specified hospital.

It is unlikely that you will find all these options in any one product, but a combination will probably be available.

Will I need to provide details of my health?
As described under section 5, there are a number of medical conditions, which you will not be able to get private medical insurance cover for. You won't normally be covered for an illness from which you are suffering, or have already had (commonly known as pre-existing conditions). Insurance companies may accept your application for cover in one of two ways.

Medical history declaration:
You are asked to fill in a form, giving details of your medical history. If necessary, the insurance company may write to your doctor for more information. It is essential that you give all the information you are asked for. If you don't, you may find that your insurance company questions claims that you make in the future. If you are not sure whether or not to mention something, it's best to do so. If you have a medical condition, which is likely to come back, the insurance company will issue a policy, but that condition (and any related to it) will probably not be covered, either indefinitely, or for a set period of time.

Moratorium:
This is when you are asked to fill in a form, but you are not asked to give details of your medical history. Instead, The insurance company does not cover any medical condition, which existed in the last (usually) five years.

These conditions may automatically become eligible for cover, but only when you do not have symptoms, or receive treatment, medication, tests and advice (from your GP or a specialist) for that condition for a continuous period of (usually) two years, after your policy has started.

There are some conditions, for example chronic conditions that will probably never be eligible for this delayed cover because you will always need regular or occasional treatment, medication, tests or advise for them. You should not delay getting medical advice or treatment, simply to get cover. If your insurance company offers a "moratorium", they will give you printed information explaining how their particular moratorium works. You may also want to ask the insurance company, or salesperson, to explain how it works.

Will my cover be affected if I am disabled?
Insurance companies will not refuse to cover you because you are disabled. As with other pre-existing conditions, your insurance company may exclude cover for treatment arising directly from your disability. However, it must be reasonable and fair for them to do this.

If you sign a 'medical history declaration', you must reveal all reveal all relevant information about your disability. If your policy automatically does not cover pre-existing conditions, then an existing medical condition causing disability, or arising from it, will not be covered. If you would like more information, call the Association of British Insurers on 0207 600 33 33 and ask for the information sheet, 'Insurance for disabled people'.

How do I make a claim?
Apart from emergency admissions to NHS hospitals, all medical treatment has to start with a referral by your GP to an appropriate specialist.

You:
Before you receive any treatment privately, you should call your insurance company to check that you are covered for the treatment that you will receive. In fact, some insurance companies insist that you do this.

Your GP and your specialist will probably need to fill in and sign your claim form. Your GP may charge a small fee, which will not be covered by your insurance.

Your specialist may recommend tests, admission to hospital as an in-patient, or day-case treatment.

Most hospitals and some specialists have their bill paid directly by the insurance company. Others will send the bills to you.

Your insurance company:
Your insurance company will give you all the guidance you need, confirm what your cover includes and if necessary send you a claim form.

Stay in contact with your insurance company who will confirm that any treatment you plan to receive is within your cover.

Your insurance company will tell you how they pay claims. Remember, if you have chosen to pay excess, you will still have to make that payment.

How is Private medical insurance controlled?

An industry code of practice:
Selling private medical insurance come under our Code of Practice covering selling general insurance and other guidelines which cover private medical insurance. The code and other guidelines cover training, face-to-face and phone selling, as well as standards of documents and handling complaints.

Your application form is a very important document. In fact, it forms the basis of your contract with your insurance company. Always fill in fully and accurately. If you don't your insurance company may refuse to pay your claim and could even cancel your policy.

Absolute confidentiality:
By law all insurance companies have to treat personal information, especially medical details with absolute confidentiality. Totally anonymous statistical information is sometimes given to outside organisations carrying out research.

A formal procedure for handling complaints:
Most insurance companies have their own complaints procedures in place, so if you have a problem with any part of your cover, speak to your insurance company first, if you are not satisfied with the way in which your complaint is handled, you can contact either the Insurance Ombudsman Bureau, or the Personal Insurance Arbitration Services (depending on which one your insurance company uses). These services are free and you can find contact details at the back of this booklet.

What if I want to change to a new insurance company?
You may change to a new insurance companies. However it is important to remember that a new company may not cover any previous, or existing medical conditions, which your current insurance company may cover. You may also lose any premiums you have paid up front. It is best to check with your new company as to how the change may affect your cover.

Your Checklist:
Before you buy private medical insurance, you need to understand the following:

• You agree to give the insurance company all the information they need. If you don't give accurate details, your insurance company can refuse to pay your claim or could cancel your policy.
• You agree to pay regular monthly or yearly premiums as long as you want cover. If you don't pay premiums, your cover will stop. Your insurance company will only pay for costs you have paid, or agreed to pay up to the last date covered by our premiums.
• The cost of your premiums may increase once a year when you renew your cover. Your individual premiums are not influences by the number of claims you make (unless your cover includes a no-claims discount).
• If you're insurance company plans on making changes and improvements to a scheme, all customers will be told before they renew. This will not prevent you continuing your cover
• If you change insurance companies, you may not be covered for conditions or treatments that your existing policy cover.

Once you have received your policy, read it carefully, you must keep to its terms and conditions. However, if you did not receive all the policy documents before you decide to buy the policy, you will be given a cooling-off period, of around two to four weeks, in which you can make sure the policy is right for you. If you decide not to go ahead with you will usually receive a full refund of premiums you have already paid, unless you have made a claim. If you want to cancel your policy after the cooling-off period, your insurance company does not have to refund your premiums - even those you have paid up front.

Useful Addresses:
If your insurance company cannot sort out your complaint, the following organisations will tell you how to go about taking the matter further (your insurance company's literature will tell you which one to contact). Their decisions are binding on the insurance company, but do not affect your right to take legal action if you want to do so.

Financial Ombudsman Service
City Gate One
183 Marsh Wall
London
E14 9SR
Phone: 0845 080 1800
Email: enquiries@financial-ombudsman.org.uk

For general information on insurance, and more specifically private medical insurance, you can contact:

The Association of British Insurers
51 Gresham Street
London
EC2V 7HQ
Phone: 020 7600 333
Website: www.abi.org.uk