Your company health insurance and the NHS

Do you live in the UK? Do you have private medical insurance paid for by your employer? Do you believe that this benefit costs you nothing? I did too until today, when I got a shock. I learnt that my employer-paid, private medical insurance has been costing me money, for something I don’t need and will never use. Not only that, but it’s contributing towards the dismantling of the National Health Service so that one day soon, I may no longer have a choice.

Paying tax on a medical scheme I never use

First a little background. I’ve recently been made redundant, due to the COVID-19 economic downturn. But until recently, like many UK employees, I had a company private medical insurance, paid for by my employer. I never used this private medical insurance. Not because I never got sick, but because, when I got sick, I used the National Health Service.

Why? Because using my company private healthcare required me to first pay for the medical procedure and then claim back the money afterwards. Claiming it back afterwards didn’t ensure I got paid back. Insurers go out of their way to wriggle out of paying – they have entire teams dedicated to this.

Cut-out from Advertisement for private medical cover

So, to avoid the hassle, I used the same, great, health service I’ve been using my entire life. The one that my national insurance contributions pay for – the NHS. My employer paid a monthly amount for a private medical insurance that I never used and until today I didn’t give it much thought. But then I found out that I had been paying, without realising it – through my taxes.

I received a letter from HMRC saying that I had underpaid tax for last year and owed them money. Further investigation revealed that the reason I owed them money was because of the private medical insurance. Employees must pay tax on the private healthcare benefit, paid for them, by their employers, whether or not they ever use that benefit.

Apparently I had underpaid my taxes by £150 last year. I assumed this meant that the amount of tax I had been paying, as a direct result of the private healthcare, was more than £150 per year. A quick phone call to HMRC confirmed that this assumption was correct. Furthermore, they confirmed that, had I opted out of my company private healthcare, I would have paid less tax.

Propping up private health is eroding the NHS

Of course, there is more at stake here than just personal finances. The fact that so many companies offer private medical insurance to their employees is propping up an industry that is slowly eroding the NHS. The coffers of private medical insurers are full to bursting from the proceeds of employer contributions for policies which are never used by their employees.

The excess cash this creates allows them to offer higher salaries to their staff, enticing the best doctors and nurses away from the financially struggling NHS. It also affects the way in which people vote: if everyone has a company private healthcare, protecting the NHS from government cuts becomes less of a priority.

If, like me, you’re a proud supporter of the National Health Service, this should make you concerned – even angry.

By accepting a company private healthcare benefit, you are paying money to dismantle the NHS. Let that sink in for a moment…

Benenden hospital in Kent is an example of a private hospital, which offers treatment for those paying into private medical schemes.

Private health insurance never covered the full cost of treatment

I lived for eight years in a country which has inadequate public health services, and it was brutal. I had to subscribe to a private medical scheme. At the time, I was an extremely healthy personal trainer, in my mid-twenties. I barely had any health problems but, even so, I got sick, or injured, from time to time.

Each time it happened it either drained my bank account, causing me to go into debt to pay my rent, or the problem remained unresolved and grew worse. The private medical scheme almost never covered the full cost of treatment. Some of these problems only got sorted out, by the NHS, once I was back in the UK.

When my parents got old, they were forced to leave that country. Even with robust private healthcare policies which they’d been paying into for decades, they could no longer afford to pay for the excess medical treatments that inevitably come with old age.

Living in a country without a good national health service, even if you’re in regular employment and even if you’re young and healthy, is not a good thing. Life changes. And not everyone in our lives is in regular employment, or young and healthy. Do we really want to become the kind of country where the poor, the old, and the chronically ill are left to die?

Opt out of company health insurance to save lives

So, my message is a simple one. If you have a company medical health insurance, I implore you to speak to your employer and opt out. It’s a no-brainer. You will save money, but more importantly, you will save lives.