Why is private medical insurance so expensive?

Find out about the costs that make private medical insurance and private treatment so expensive - things like technology, staffing, drugs and supportive medicine


The cost of private medical insurance can seem high, but that is because it has to cover a wide variety of high costs. Modern medical treatment is expensive because of the combination of expensive technology, staffing costs and the spending required on drugs and supportive medicine.

Medical care for an aging population

Our aging society, combined with ever advancing treatments, has seen the cost of healthcare within the NHS spiralling upwards. Naturally many of these financial pressures affect the private health sector too, forcing up the cost of private medical insurance, with AXA PPP's price rise of 8% last year typical of the industry.


High treatment costs

It takes many years of training and practice for doctors to qualify and then become consultants, so their fees reflect their charges. For example, a private appointment with a consultant costs between £150 and £250, a knee replacement operation costs upwards of £10,000 and each night you spend in a private hospital costs from £200 to £500.

According to the Association of British Insurers (ABI) the medical insurance industry pays out over £7 million per day in claims and over £1 billion per year in consultant fees alone. When you compare these costs to the average premium for a non-smoking 35-year-old, at around £500-£1000 per year, perhaps private medical insurance doesn't seem so expensive after all.


More personal service

With private medical insurance, you are usually guaranteed a private room with en suite facilities, you will have a choice of excellent menus and have free use of telephones, TV and internet services. All of these luxury extras are taken for granted in private hospitals, but they all cost money.

A good staff to patient ratio

Private hospitals have much higher staff-to-patient ratios than the NHS, and so have far more time for their patients. This improves many factors from standards of cleanliness to recovery times and patient satisfaction.

Private hospitals and clinics have to have many more specialist staff, such as consultants and surgeons, anaesthetists and theatre nurses. They need to ensure they are able to treat people on demand, without long waiting lists, and give them the individual time and attention they need. Naturally these professionals all cost money, which adds to the cost of private medical insurance.

Advancing treatments

One of the biggest factors driving up the cost of private medical insurance is the ever increasing range of treatments that are available. A high-tech hip replacement operation, which is becoming increasingly routine in our ageing population, costs between £7,500 and £13,500. Similarly, while new scans and new diagnostic procedures hugely improve outcomes for patients, they also push up the cost.

Commercial pressures

A final factor in setting the cost of private health insurance is the commercial demands of the company providing the policy. While some organisations are 'not-for-profit', or are run as mutual societies for the benefit of members, many other insurance providers are commercial companies with shareholders who want to see a return on their investment.

Want to know more?

Why should I buy private medical insurance?

What does private medical insurance cover?

What does private medical insurance not cover?

What does private medical insurance cost?

What types of private medical insurance are available?

What type of scheme is right for me and my family?

Where do I go for a quote for private medical insurance?

Should I go to a private medical insurance broker?

How do I minimise the cost of private medical insurance?

What questions should I ask the insurer or broker?

What should I watch out for when buying private medical insurance?

Who are the biggest private medical insurance companies?

How do I compare private medical insurance providers?

How to choose the right private medical insurance policy

Does private medical insurance provide cancer cover?

What are the common restrictions on private medical insurance policies?

What are the alternatives to private medical insurance?

What is the best private medical insurance for elderly people?

Private medical insurance for people with pre-existing medical conditions


Will private medical insurance cover me if I fall ill abroad?

What does a moratorium on private medical insurance mean?

What does fee assured mean for patients with private medical insurance?


How to make a private medical insurance claim

What do I do if my claim is rejected?


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