Back to Basics: What is PMI and how does it work?

Sunday 20th September 2020

Back to Basics: What is PMI and how does it work?

a photo of the article author

Article By Kym Boulton

Back to Basics: What is PMI and how does it work?

The National Health Service (NHS) is a valuable asset and we all agree that it does the most remarkable job. I think that this has been showcased immensely during the pandemic. However, most people would also accept that even under normal circumstances the NHS can be under strain. For certain treatments or referrals, waiting lists can be very long and treatments limited.

Private Medical Insurance (PMI for short) enables you to skip the waiting lists, benefit from private hospital rooms and often to receive drugs and treatments that are unavailable on the NHS.

PMI is designed to cover the cost of private medical treatment for acute conditions. An acute condition is a disease, illness or injury that is likely to respond quickly to treatment and return someone to the state of health they were in before, or lead to a full recovery.

How will PMI benefit my business and employees?

Group PMI is an attractive employee benefit that may help employers to retain staff and keep them and their business healthy. Here’s how:

  • Insured employees can receive prompt treatment at a time convenient for everyone. This could mean less time away from work.
  • Insured employees will be given access to private facilities, often with access to a GP digital service offering virtual consultations. This has proved incredibly valuable at this unprecedented time.
  • Insured employees will be given a choice of consultant and hospital for their treatment.
  • Insured employees are often given access to specialist treatments, often unavailable on the NHS.
  • Many policies include an option for insured employees to include dependants (at the employees’ own cost) for total family protection.

A group PMI scheme can be tailored by underwriting/excess/hospital lists and outpatient limits to suit the employer’s requirements and budget. It can cover all employees or those entitled through their contract. There is also a host of optional extras which can be included such as Mental Health, Optical and Dental and even Travel so the benefit can really accommodate the needs of the employer.

Underwriting Terms

MHD – Medical History Disregarded in most cases allows previous medical conditions to be considered for claim. Regardless of when these conditions existed. Because of this, this is the most expensive form of underwriting.

Moratorium underwriting excludes all pre-existing conditions from the last five years for a set period, usually two years, but may then include them after that. It is an alternative to the system of full medical underwriting, which may specifically exclude some pre-existing conditions permanently following a full medical report or questionnaire. It is also a great option for reducing paperwork as for the most part new employees will not have to complete an application as details of pre-existing conditions will be requested at the point of claim.

Fully Medical Underwritten policies tend to offer the most competitive rates by individually underwriting each applicant and excluding any pre-existing medical conditions.

How has Coronavirus impacted Private Medical Insurance

Given that COVID-19 is a public health emergency, it is appropriate that diagnosis and treatment of the virus are conducted by or at the direction of the NHS.

The pandemic has affected the availability of treatment under private medical insurance schemes. However, things are starting to change with more treatments now becoming available. Clearly, this may be affected again should we experience a second wave. However, I think that we have learned a lot from the pandemic, for example with regard to the development of virtual GP consultations and additional benefits such as written prescriptions delivered directly to members.

Some of the main providers of PMI really stepped up during this time and offered additional benefits to their members. Vitality Health, for example, introduced a COVID-19 Hospitalisation Cashback. This new benefit will pay eligible employees £250 per day for any admission as a result of COVID-19, increasing to £500 a day from the eighth day of hospitalisation, up to maximum of £5,000. Others offer a 24/7 Private GP Helpline for coronavirus support.

Support with employee mental health has also been of paramount importance during the pandemic and a great core benefit to any Private Medical scheme.  If members are experiencing mental health concerns during these times, whether they are working from home or for any other reason, they have been able to use this benefit.