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Understanding private sector healthcare costs

Understanding private sector healthcare costs
Image source: Getty Images.

Here in the UK, the NHS does does a remarkable job of making free healthcare accessible to all citizens. However, you still have the option of seeking private insurance if you wish. Here is a brief overview of how private health insurance works and how much it costs.

What is private health insurance?

Simply put, private health insurance refers to an insurance policy that covers the cost of private healthcare. Like other types of insurance, you pay monthly or annual premiums and, should you get sick, the insurance pays all or some of your medical costs.

Private health insurance can act as a supplement to the NHS. It can help you bypass long waiting times to access healthcare and give you a wider choice of treatment options. Additionally, private health insurance can help you get access to better hospital accommodation (such as a private hospital room instead of a mixed ward).

Some people are able to get private insurance through their employer (as part of their employee benefits package). For most of us, however, going private means we have to pay the insurance costs ourselves.

What does private health insurance cover?

The cover you get from private health insurance is dependent on the kind of policy you buy. Usually, companies will offer different coverage levels (basic, intermediate and comprehensive).

You can, for example, choose to take up a basic policy that only covers essential inpatient treatments. Alternatively, you can go for a comprehensive policy. In addition to inpatient treatment, this policy might also cover outpatient services, including specialist consultations, tests and therapies.

However, private health insurance doesn’t usually cover chronic conditions, such as diabetes, HIV/AIDS, heart disease and epilepsy, where the treatment goal is to keep symptoms under control. You can access treatment for these conditions on the NHS. In fact, for serious illnesses such as heart disease, you will get priority treatment under the NHS.

Private health insurance also does not provide cover for pre-existing health conditions, organ transplants and cosmetic surgeries.

How much does private health insurance cost?

According to, the average premium for private health insurance in the UK is  £1,435 per year. This amount can be higher or lower depending on several aspects including the provider, the policy option (and cover level) and your personal circumstances (e.g. your age).

Many providers of private health insurance actually work with age bands, offering specific premiums for each age band. Older policy holders are considered to be a higher risk and can therefore expect to pay more for health insurance than someone in a lower age band. 

Your health insurance premiums can also be affected by your lifestyle and health status (e.g. whether you smoke or not) and even by your postcode.

To find out how much you are likely to pay, it’s a good idea to contact a number of providers to request a quote. You can then compare quotes to establish the right policy for your individual needs.

Many providers, such as Aviva, BUPA, Vitality and AXA have online platforms where you can fill in your details and obtain a quote. Another option is to use health insurance comparison websites such as ActiveQuote which will do a price comparison for you.

Alternatively, you can hire a health insurance specialist or adviser who might not only be able to help you figure out the costs of private health insurance but can also help you find a provider and cover that are a good fit.  


Taking out private health insurance is a personal choice. The NHS covers most healthcare needs free of direct charge. Private insurance is valuable for swifter access to medical treatment and access to a wider range of treatment options and medicines that may not be available on the NHS.

There are alternatives to private health insurance if you require private treatment but don’t want to be bound to an insurance policy. You can, for example, use your savings or your emergency fund to cover all or part of your medical costs.

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