Private health insurance prices rise as record numbers try to avoid NHS queues

Private healthcare costs are rising as record numbers of Britons choose to pay for treatment to beat NHS waiting lists.

Private hospital admissions hit a record high of 238,000 in the first three months of 2024, latest figures show. As a result, insurers cash in on rising demand by raising prices.

said the brokers i They have seen prices rise by about 25 percent in the past year due to an increase in the number of claims and rising medical costs.

Private entries are at an all-time high. The biggest growth in patients paying private health services for their procedure — 13 percent — was among patients ages 20 to 39, according to statistics from the Private Health Care Information Network (PHIN), a government-backed organization that tracks paid care. In the United Kingdom.

Between January and March, 238,000 private hospital admissions were paid for by medical insurers or directly by patients themselves – more than in any previous quarter on record.

Meanwhile, the waiting list for NHS treatment is 7.62 million, covering 6.39 million patients.

Private medical insurance helps pay for a range of medical treatments, tests, surgeries and drugs for people with health policies.

The top five procedures paid for with private medical insurance are cataract surgery, chemotherapy, endoscopy, colonoscopy and hip replacement, according to PHIN. Orthopedics and ophthalmology are among the top 10 services with the longest waiting times in the NHS.

Women continue to be the primary users of private healthcare, with 88,100 female admissions paid for by medical insurers in the first quarter, compared with 79,900 for men.

said one broker i That increased demand for “non-routine benefits such as menopause, fertility and neurodiversity coverage” has driven up insurance costs.

Patients pay for policies monthly or annually. When they need treatment, they can choose to get it from a private hospital where the cost is covered by their insurer. In some cases, patients are still required to pay an excess – an agreed amount paid before the remaining cost is covered by insurance.

Many workers get private medical insurance through their employers, which means their monthly or annual premiums come from their paychecks, but often at a lower cost.

Dr Christopher Smith-Brown, Clinical Adviser at PHIN, said: “Our data shows that record numbers are turning to the private sector for their healthcare and the number of people using private medical insurance is at an all-time high.

“This could be due to an increase in the number of employers offering insurance as an incentive, insurers marketing their products in different ways and to different potential customers or concerns about NHS waiting lists and the length of time it takes. saw.”

An increase in younger people indicates that they are more inclined to use private medical insurance for elective procedures.

Brett Hill, head of health and safety at consultancy Broadstone, said the NHS crisis, now with “historically high” price rises, is prompting more workers to take up membership.

Demand for digital GP appointments has “exploded”, he said, with claim costs rising from the end of 2022 as members increasingly turn to employer-funded insurance for care they cannot easily access through the NHS.

“I’ve been in this industry for over 25 years and I can’t remember a period where we’ve had such a severe period of claims inflation in such a short period of time,” Mr Hill said.

“On average employers will see their health care costs increase by 15 or 25 percent on policy renewals this year. In rare cases, some clients have seen premium increases of more than 50 percent this year.

Workers typically pay taxes on only a portion of their costs, with the employer paying most of the plan. “It will affect an employee more if they choose to pay to add their spouse or their children to their coverage,” Mr Hill added.

“If premiums go up 15 to 25 percent on average, the cost to workers who choose to pay out of their wages to add their family members will go up 15 to 25 percent on average.”

Matt Fletcher, a senior health insurance broker at Globacare, said the cost of private health insurance schemes had risen by 10 to 15 per cent, although he had seen “much more” increases this year.

“It’s very frustrating because obviously our job is to take care of our customers year after year, and when prices go up anywhere between 18 and 24 percent without them making a claim, it’s very difficult,” he added.

“Workplace schemes, if it is a policy that works well, can come [an increase of] 5 to 10 percent. A poorly performing policy can be anything up to 40 percent.

Rachel Western, head of health and risk at insurer Aon UK, said it was seeing corporate medical inflation levels of up to 18% from providers, with premiums increasing “above historical book performance” amid a surge in claims.

Duncan Sutcliffe, director of insurance broker Sutcliffe & Co, said prices for employer and individual schemes had risen by around 10 per cent in the past year, while inquiries about private health services had tripled or quadrupled. Widespread epidemic.

Mr Sutcliffe added: “There is a huge increase in demand on health services because the NHS is in such shock and our aging population, prolonged Covid and the downturn caused by Covid will increase the demand.”

AXA Health said demand is rising across the healthcare industry for “primary care, diagnostic services and specialist care”. “Private health care insurance pricing must be fair and sustainable, so these market-wide trends must be reflected in our approach to deliver quality care to our customers and members now and over the long term,” added a spokesperson.

“Like all businesses, our costs generally rise in line with inflation, but we strive to provide good value to our customers.”

Aviva said private medical insurance premiums reflected “claims inflation” but were also affected by utilization rates, medical progress – particularly in relation to cancer treatment – and individual factors such as age, location and benefit selection. “We are committed to providing good customer value and our strong supply chain relationships and value-based healthcare strategy enable us to continue to offer affordable premiums to our customers,” a spokesperson added.

Data from the Association of British Insurers shows a record 4.4 million people will be covered by work-related health insurance in 2022 – up 8 per cent on the figure for 2021. The total number of people covered by health insurance — both individual and workplace policies — increased 7 percent to 5.8 million in 2022, the highest since 2008.

Payments for health insurance claims also hit a record high, reaching nearly £3 billion overall, with the average claim paid out for 2022 at £2,147.

A Department of Health and Social Care spokesman said: “We have inherited a two-tiered health service where those who can afford it go private and those who can’t are left behind. As Lord Darcy’s independent report has revealed, the NHS is broken and too many patients have to wait too long for treatment. This government is determined to change that.

“We are working to tackle the immediate problems and we are delivering a 10-year plan to radically reform the NHS so we can all have it when we need it.”