PMI or health cash plan? How to decide

AP Photo/Paul Sakuma

With reports that NHS hospitals are failing to provide adequate care for elderly patients, and one hospital scandal or another never far from the news, it's easy to see why people view PMI as a serious option when it comes to healthcare.

But it's expensive to say the least, so could a healthcare cash plan be better? Read on for the pros and cons of both.

What's the difference?

Private Medical Insurance (PMI) helps cover the cost of private healthcare if you prefer not to wait for treatment on the NHS. It allows you to choose when and where you want to be treated rather than having to sit on waiting list. Usually a policy lasts for a year and will pay out for any inclusive treatment you need.

Healthcare cash plans are quite different. Instead of paying insurance premiums, you pay money each month and when you receive treatment in areas which the NHS doesn't pay for such as dental or optical treatment you get a chunk of the money back.

Who is PMI good for?

If you can't bear the thought of being on a waiting list for treatment, or have heard too many horror stories about NHS hospitals then PMI could be for you. Bear in mind though that it is expensive and like most insurance policies comes with plenty of exceptions. It is considered a luxury, rather than a necessity.

It is designed to cover short term acute conditions which can be treated quickly. It does not cover long term illnesses like diabetes, incurable or chronic conditions, normal pregnancy and childbirth or any routine check-ups by a GP, dentist or optician.

Who is a healthcare cash plan good for?

It is really designed to help with the cost of smaller, more routine treatments like dental bills, opticians and even things like the expenses of having a baby or spending time in hospital.

It's a cheaper option than PMI and while it won't bump you up any waiting lists or entitle you to private health care of any sort it will alleviate other non-NHS bills and actually covers the costs of certain things that PMI won't. It's more of an added extra to NHS healthcare, rather than an alternative.

What else do you need to know?

Remember that while PMI does pay for private medical treatment it is not a complete replacement for the NHS. Accident and emergency treatment is carried out solely by the NHS so you will still be treated by them in that instance.

Check whether or not your company offers you PMI as part of your employee package. And if it doesn't but your partner's does, you might be able to be included on theirs.

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