Self-pay vs health insurance: what is the difference?

In the UK, the NHS provides healthcare that is free at the point of use for all residents.

If you are considering private treatment, you might be wondering whether to pay for it yourself or take out health insurance to cover the costs. In this article, we compare both options to help you make an informed decision.

How does private healthcare work in the UK?

In the UK, private healthcare is provided by independent hospitals and clinics, and by NHS hospitals with private facilities. Anyone can use private healthcare by paying for their treatment or consultation.

Private healthcare works alongside the NHS and is not a replacement for it. For example, private hospitals do not usually offer all the services the NHS does, such as A&E, intensive care and maternity care. Read more about NHS and private healthcare.

What are the benefits of private healthcare?

• treatment without waiting for an NHS referral
• choice of hospital and consultant
• flexible appointment times
• modern, comfortable facilities

How can you access private healthcare in the UK?

Anyone can access private healthcare by paying for it themselves, known as self-pay. Private healthcare can be expensive.

Individuals, families and companies can also take out private health insurance. In return for a monthly or annual premium, the insurer pays for eligible private treatment. Read more about private healthcare.

What is the difference between self-pay and private health insurance?

Both are ways to access private medical treatment in the UK. With self-pay, you pay the hospital or clinic directly for your treatment. With private health insurance, your insurer pays the costs on your behalf, in line with the terms of your policy.

Paying for treatment yourself

With self-pay, you cover the cost yourself at the point of use. Some hospitals offer flexible payment options.

Benefits of self-pay

Choose any hospital and consultant

When you pay for your own treatment, you can choose any hospital and consultant. You are not limited by a hospital list, as you might be when claiming on health insurance.

Any treatment available through a private hospital

Private health insurance usually excludes some treatments, such as cosmetic treatment. With self-pay, you are not limited by policy exclusions.

Treatment for any condition

With self-pay, you can be treated for conditions not normally covered by health insurance, such as chronic and pre-existing conditions. Read more about chronic and pre-existing conditions.

Downsides of self-pay

The biggest downside of self-pay is the cost. Treatment can be expensive, depending on your condition and the hospital, and many people cannot afford a large bill at once.

The Private Healthcare Information Network publishes information about private hospitals and consultants.

Taking out health insurance

Health insurance, also known as private medical insurance, can make private healthcare more affordable. It covers private treatment for acute conditions that start after your policy begins. An acute condition is an illness or injury that is likely to respond quickly to treatment.

A health insurance policy usually lasts 12 months, with the option to renew. You can pay monthly or annually. Read more about our individual and family health insurance.

Benefits of health insurance

A more affordable way to access private healthcare

Health insurance spreads the cost of private healthcare, so you are less likely to face a large bill if you need eligible treatment. This means you can benefit from private healthcare, including:

• treatment without waiting for an NHS referral, subject to the terms of your policy
• more choice over where and by whom you are treated
• flexible appointment times
• more comfort and privacy in a hospital room

You can tailor your cover

Most insurers let you tailor your policy by adding optional benefits. Most policies cover inpatient and day-patient treatment. Other options can include:

• outpatient cover
• dental cover
• mental health cover
• physiotherapy
• therapies such as chiropractic, osteopathy, podiatry and acupuncture

You can add your family

You can usually add your partner and children to your policy, so your family can use private healthcare when needed.

Downsides of health insurance

Health insurance has limits, for example:

• some conditions are not covered, such as chronic and pre-existing conditions
• some treatments are not covered, such as cosmetic treatment, treatment for drug and alcohol addiction, and maternity and childbirth costs
• financial limits may apply to what your insurer pays, depending on your policy
• your choice of hospital and consultant may be limited with some policies

Self-pay or health insurance: which is better?

Self-pay gives you full control over where, when and by whom you are treated. However, private medical costs can be high.

Health insurance is a more affordable way to access private healthcare for many people, because it helps you plan for unexpected illness. However, it does not cover every condition, and you may still need to pay some costs or use the NHS for services your policy does not cover.

Whichever route you choose, you may still need the NHS for services such as emergency treatment and GP visits.

Freedom Health Insurance cannot give advice on which cover is right for you. For independent advice and to compare providers, you can find a health insurance intermediary through the Association of Medical Insurance Intermediaries.