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Almost 7 million UK adults now have private medical insurance

Recent analysis from Broadstone has found 6.9 million UK adults now has a private health insurance policy - how will this affect UK medical care?

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 25 October 2023

6 min read

Almost 7 million UK adults have private medical insurance

Over the past 5 years, the number of adults with private medical insurance (PMI) has increased by 1 million policyholders, according to a recent analysis by Broadstone. That’s by far the most significant increase in recent times, which has most likely been driven by the recent struggles of the NHS and people being more concerned about their health following the Covid-19 pandemic.

I can completely understand why health insurance is growing in popularity now, with extra perks such as gym discounts, 24/7 GP access and more benefits included as standard. It was also found that many people are getting health insurance as part of an employee benefit scheme, meaning they don’t even need to pay for it themselves.

The main question here is whether a rise in demand for private healthcare will cause issues for consumers long term. I’m hopeful that this shouldn’t be the case, with insurers and healthcare providers working together to avoid this happening.

QUICK SUMMARY – Almost 7 million UK adults now have private medical insurance

Private medical insurance (PMI) is on the rise in the UK, with almost 7 million adults opting for it, driven by concerns about NHS challenges and health issues post-Covid-19. Is private health insurance a good option for you?

  • Health insurance offers benefits such as reduced waiting times for treatments, wider choice of specialists – and many employers now include it as part of an attractive employee benefits package. Most people in the UK with private medical insurance receive this from their employer.
  • The growing interest in PMI is expected to continue, although it may lead to premium increases due to NHS challenges leading to higher demand for private care. Hopefully this is something that can be avoided so costs don’t rise dramatically.
  • If you’re thinking about private healthcare for you or your business, it’s usually a good idea to shop around for the best quotes. You can also speak to a health insurance specialist who will normally be able to offer free advice about what to do.

Here’s some of the key findings from Broadstone’s analysis of data from the Financial Conduct Authority’s Financial Lives Survey.

  • Over 3 quarters of private medical insurance customers receive their cover through their employer
  • 19% of UK workers are buying their own private health insurance policies to help them to fund private medical care when needed
  • Those with the highest level of health insurance cover tend to be between 35-54 years old – it definitely makes sense why health insurance may be most appealing at these ages, as we are more likely to have health issues as we get older
  • Around 6.9 million people in the UK now have private health insurance – an increase of 1 million in the last 5 years

Why are more UK consumers choosing private health insurance?

The Financial Conduct Authority’s (FCA) Financial Lives Survey, showed that 13% of adults in the UK now have private health insurance, which is roughly 6.9 million people. This type of coverage has been steadily gaining popularity over the last few years.

There are several reasons why more UK consumers are choosing private medical insurance (PMI) over relying solely on the National Health Service (NHS). Here, I’ve outlined some of the main reasons why UK residents are now buying (or thinking about buying) opting for private healthcare:

1. Reduced Waiting Times

One of the main advantages of PMI is the ability to access healthcare services with minimal waiting times. NHS waiting times for non-urgent treatments and specialist consultations can be lengthy, leading people to opt for private care where they can receive quicker treatment.

2. Wider choice of specialists

Private health insurance policies typically offer policyholders the freedom to choose their preferred specialists, consultants, and hospitals. This level of choice and control over their healthcare decisions is highly appealing to many people, especially those concerned about the level of care available on the NHS.

3. Prompt Diagnosis and Treatment

Early diagnosis and timely treatment are really important for many medical conditions. Private healthcare often ensures quicker access to diagnostic tests, which can lead to better health outcomes.

4. Enhanced Facilities and Comfort

Private hospitals and clinics often offer more comfortable and luxurious facilities, contributing to a better overall patient experience. You would need to weigh this against how much you would spend on a private health insurance policy and whether it is worth it for you.

5. Comprehensive Coverage

PMI policies can cover a wide range of medical services, including consultations, diagnostic tests, surgery, and hospital stays. This comprehensive coverage can help to provide peace of mind for policyholders that they’re well covered if they become unwell.

6. Your employer might pay for it

Many employees receive PMI as part of their benefits package, making it a valuable perk offered by employers. This employer-provided coverage plays a big role in the growing number of PMI customers in the UK with around 76% receiving private health cover through their employer or business.

7. Option for extra benefits

PMI policies may include add-ons such as dental care, optical care, and mental health services, enhancing the overall value for consumers. Policies are normally pretty flexible too, allowing you to add benefits and remove those that aren’t worth it for you.

8. Tax Benefits (perk for employers)

In the UK, private healthcare schemes can be tax-deductible for businesses and are not considered a taxable benefit for employees. This tax advantage encourages both businesses and employees to consider PMI.

9. Rising Health Concerns

With growing health concerns and lifestyle-related conditions, individuals are becoming more proactive about their health and well-being. PMI helps address these concerns by providing access to a range of medical services.

10. Challenges in the NHS

Most of us are very aware of the challenges being faced by the NHS right now, including budget constraints and increased demand for services. Some consumers may feel that the NHS may not provide the level of care and timeliness they desire, leading them to explore private healthcare options.

11. Private Healthcare Innovations

Why is business health insurance becoming popular in the UK?

One interesting thing discovered in this new research is that a majority of those with private medical insurance (76%) get it through their employee benefits package, making it a valuable perk offered by employers.

Employee health insurance is growing in popularity, as an exciting and attractive perk to be offered by a current employer or when interviewing for a new position. Many employers will now provide health insurance because:

  • It keeps employees happy and makes them less likely to leave
  • It helps to reduce employee sickness and get unwell employees back to work faster
  • It can help to convince new staff members to join the business

The rising number of people with private health insurance is expected to continue. Economic inactivity due to chronic illnesses and concerns about access to healthcare through the NHS are driving this trend. This means more consumers are looking to ensure they have medical coverage when they need it.

In addition to the increase in PMI coverage, private healthcare admissions have reached record highs, indicating the demand for private healthcare services.

While the growth in PMI coverage isn’t expected to raise premiums on its own, the pressure on the NHS and the increased frequency and cost of claims may lead to higher premium costs. These challenges in the healthcare system are contributing to potential premium increases for PMI policies.

However, the expansion of the broader workplace health and well-being sector is driving innovation, which can help balance out cost increases. Employers are exploring health screening programs and digital GP services, which can lead to earlier detection of serious illnesses and reduce time away from work.

Private health insurance providers are also streamlining the process, reducing waiting times for treatment and costs by directing employees to fast-track pathways for medical tests and mental health support. This helps make healthcare more accessible and affordable.

The growth in PMI coverage in the UK is a positive development for consumers, ensuring they have access to timely and quality healthcare services. The challenges in the NHS and the rise in healthcare demands are factors to watch, but innovation and new options are emerging to address these challenges and provide better health and protection for workers.

If you are thinking about buying private health insurance for yourself or your business, I’d recommend doing some research to ensure you are fully confident in your choice of policy. It can be helpful to speak to a health insurance specialist if you are unsure about what your best options are.

More health and health insurance news

Here’s some more of the recent news stories about UK health and wellbeing and health insurance policies.

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