Counting the many costs of going private

The flu epidemic - and last week's claims that only a few emergency beds remain available in the NHS - are enough to make private health cover look extremely attractive. But people over 50 are often wary of taking out cover, however healthy they may be. They are far more likely to make claims than other people. What is more, they are more prone to need not just hip operations, but expensive hi gh-tech operations such as heart bypass surgery.

The flu epidemic - and last week's claims that only a few emergency beds remain available in the NHS - are enough to make private health cover look extremely attractive. But people over 50 are often wary of taking out cover, however healthy they may be. They are far more likely to make claims than other people. What is more, they are more prone to need not just hip operations, but expensive hi gh-tech operations such as heart bypass surgery.

Even if they can afford premiums now, the costs two or three years hence may be another matter. First comes the general inflation. Last year's bills from Bupa were 14 per cent higher than those in 1998 - and the annual growth in the cost of premiums has worked out at around an annual 15 per cent over the last five years.

But more important come the extra costs, which just reflect your age, when premiums can rise dramatically.

Assume you want a policy covering all the options from Legal and General. Penny O'Nions, of the Onion group, who was a doctor, says: "It will cost you £46.53 a month at 50, and £62.08 a month at 60. Rates move up sharply after that everywhere.

"Typically, you pay about 25 per cent more at 65 than you would at 60. There is then a 20 per cent jump in premiums between 65 and 70, and 15 to 20 per cent more between 70 and 75. Inflation increases come on top."

Once you are on the books, insurers will always offer you cover, however ill you may have been. But switching to a different group always means starting from scratch.

Budget Plans come under many names, but all depend on cutting benefits or limiting where you can go. Most insurers have special arrangements with a network of hospitals. Prime Health will cut charges by 15 per cent if you take that option.

Most plans exclude some or all outpatient treatment, though terms vary. Jan Lawson of the Private Health Partnership says: "Look for the small print. Some insurers will cover outpatient treatment only it follows a stay in hospital. Others will only accept chemotherapy or radio-therapy after cancer has been diagnosed - and there are plans which exclude even them.

"But cancer is one of the commonest serious complaints and a course of chemotherapy can cost up to £1,000."

Six-Week Waiting Plans look good too. This time, you have to take a NHS bed, if it becomes available within six weeks - or occasionally 12 weeks. That should cover the most obvious emergencies - and can bring you savings of about 30 per cent.

Taking An Excess making you responsible for part of the bill is always possible, whatever the plan. At Norwich Union, taking on the first £500 of costs each year cuts premiums by 10 per cent. That rises to 23 per cent if you pay the first £1,000. Western Provident even offers a scheme, where you settle bills of up to £4,000. If you take it, you pay only a quarter of WPA's standard charges.

Paying Your Bills Annually rather than in monthly instalments can reduce the cost by 5 per cent. If you use a direct debit, there is a further 10 per cent saving.

A Fixed Price Plan has been launched by Bupa, which has almost 25 per cent of the market. People can choose to have premiums fixed for five or 10 years, or pay a lump sum here and now. If they change their mind, Bupa repays the appropriate proportion.

People using the scheme pay over the odds, because the insurer cannot make any increases covering health cost during that time - or charge more as you get older. But the guarantee of fixed bills, and the promise of continued medical cover when the plans runs out have a strong appeal. The cost of premiums may rise sharply when plans end.

The plan, launched last month, is the first of its kind. But sales have been high on Bupa's existing non-insured scheme, which provides a cap on the costs of each type of operation.