The Spiralling Costs of Private Healthcare – September 2013

03 Sep 2013

It is a known fact that ‘Medical Inflation’, which is the average annual increase in the cost of delivering medical care and treatment, currently sits way above general inflation.

These increases are one of the primary reasons for the annual rise in premiums for private medical insurance.  In the past, employers have generally been willing to accept and absorb above inflation premium increases by weighing up the cost of the cover against the benefits, which include patient/employee choice, privacy, speed of diagnosis and treatment, and access to the latest drugs and procedures. That said, with medical inflation currently running in excess of 9%, employers are increasingly looking at ways to control these costs.

Healthcare Cash Plans

These type of Healthcare insurance plans are becoming increasingly popular with both employers and employees and are used to both compliment or in some cases, replace traditional private medical insurance schemes.  Typically, they are available at a lower cost than private medical insurance and these costs do not escalate year on year.   Healthcare Cash Plans encourage employees to be proactive about their health as they reimburse the cost of private consultations as well as optical, dental and physiotherapy treatments.

As Healthcare Cash Plans reimburse the cost of everyday healthcare that most people incur, it is usual for the majority of the scheme members to reclaim costs under the plan each year and the higher level of engagement compared to private medical insurance means the benefit is often more valued and appreciated by employees.

One of the benefits of using a Healthcare Cash Plan to compliment a private medical scheme is to reduce the volume of low value claims.  This is likely to lead to reduced costs on the private medical insurance and in some cases can mean the cost of the Healthcare Cash Plan is funded by the savings.

There is no medical underwriting when establishing a Healthcare Cash Plan and cover can start as low as £1.00 per employee per week.

What next?

If you are concerned about the rising costs of Private Medical Insurance and would like a review of your existing scheme to see how a Healthcare Cash Plan could compliment it, please do not hesitate to contact us.

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  • Wingate will discuss your circumstances and objectives and identify your specific needs.
  • Based on this research we will provide you with a report confirming the options available and our recommendations without cost or obligation.
  • If you wish to consider changes to your benefits, we will provide advice on your options

Wingate Benefits Solutions is here to assist you with all aspects of your Employee Benefits offering. Should you wish to discuss this or any other such matter please contact your Wingate Benefit Solutions adviser on 0844 406 0027.

Tax and legislation are liable to change. This information is based on Wingate Benefits Solutions’ current understanding of UK law and HM Revenue & Customs practice and legislation. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of the information contained herewith. It is recommended that professional advice is sought prior to entering into any financial arrangement.

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Exclusively focused on UK organisations with employee headcounts of up to 1000, the data and conclusions shared in this report are directly relevant to companies of this size and profile.