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My health insurance premiums have shot up; what can I do?

By
Kirsty France - Personal Finance and Healthcare Expert - myTribe
Kirsty France
Personal Finance and Healthcare Expert
Kirsty is a personal finance and healthcare expert who enjoys demystifying legal and insurance topics for a wider audience. She’s a former solicitor with a personal injury and insurance background.
Kirsty France
Reviewed by
Kirsty France - Personal Finance and Healthcare Expert - myTribe
Chris Steele
Founder and Editor
Cert CII (F1, IF7 & I10)
Chris Steele is myTribe’s trusted expert in private health insurance and healthcare, with over a decade of experience in the field. As the Founder and Editor of myTribe Insurance Experts, Chris is a Chartered Insurance Institute (CII) qualified professional with certifications in Insurance, Legal and Regulatory (IF1), Healthcare Insurance Products (IF7), and Insurance Broking Fundamentals (I10). Chris’s research and insights are regularly cited by national media, and he has contributed to leading consumer finance publications, simplifying complex topics to help consumers better understand private medical insurance. His expertise spans private health insurance, market analysis, and health insurance regulations, making him a respected voice in the UK insurance market.
Chris Steele
Reviewed by
Updated on
May 13, 2025

Investing in health insurance gives you the benefit of private healthcare when needed. You might expect your premium to increase, but what if a sharp increase has you questioning whether your policy is still affordable? We share some ideas to help you lower the cost of your premium.

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How do health insurance renewals work?

When you first buy health insurance, your chosen insurer considers various risk factors and gives you a quote based on the likelihood you'll claim on the policy. The more likely you are to claim, the higher your premiums will be. They'll consider factors such as your age, where you live, whether you smoke and more.

At the end of your first year of cover, they'll have more information about you to add to their risk profile. In particular, you may have claimed for significant treatment or not claimed at all. They'll review this information and give you a health insurance renewal quote that reflects any changes.

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Why do premiums increase on renewal?

We've already mentioned that insurance providers add new information to their risk assessment when calculating your renewal quote. External factors outside your control also influence increases in your health insurance premiums.

Here are the main factors that contribute to health insurance premium increases.

1. Inflation

The cost-of-living crisis impacts more than household bills; it also affects health insurance premiums. Higher inflation rates mean getting less for your money and paying more if you want your health insurance coverage to stay the same.

Inflation also impacts private health insurers as they may pay more for rent, utility bills and staff wages.

2. Medical inflation

Medical inflation differs from general inflation as it focuses on the cost increases associated with medical treatments. The cost of medicines, hospital and consultant fees, and investment into cutting-edge treatments all contribute to medical inflation.

For example, new diagnostic or surgical techniques often involve buying new equipment. The latest medications cost more initially as pharmaceutical companies price them to recover their development costs.

It all means that medical inflation can increase your health insurance costs because your insurance providers want to ensure you can access the latest treatment but must cover the cost.

3. Age

None of us are getting any younger, and your age is one unavoidable factor that will increase your health insurance premiums. Our risk of ill health increases as we age, meaning we're more likely to claim. Your health insurance premium increases to reflect the risk.

Health insurance providers tend to group policyholders into age groups, meaning you can face a significant price hike when you move up a band. This isn't always the case, as insurance providers differ in how they calculate premiums. Some adjust age-related premiums every year, giving a more gradual increase.

4. Claims history

When you take out a health insurance policy, you'll often start with a significant no-claims discount of 65-70%. If you don't claim on your policy, you'll see this improve, but the limit is often in the region of an 85% discount. On the flip side, if you claim, your no-claims discount will reduce so renewal premiums will be higher. How much your claims affect your premiums varies between insurers, but it's usually linked to the size of your claim.

Chris Steele, founder of myTribe, explains:

Chris Steele, founder of myTribe Insurance Experts
"Many people take out health insurance thinking it works like car insurance, where you start with a 0% no-claims discount and build it up. It's the opposite with private medical insurance. You start with a significant discount and then lose some of it when you claim, which can see premiums rise sharply.

When it comes to renewing your policy I would always recommend comparing providers to ensure you get the best cover at the best price."
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What can you do if your health insurance premium has increased?

If your health insurance prices have only increased slightly, you might be happy to absorb the cost. However, if your renewal quote contains a hefty price hike, you may wonder whether it's worth having health insurance any longer. Thankfully, there are ways you can reduce your premiums and save money on private healthcare insurance.

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Get in touch

MyTribe guides help you understand your private healthcare and health insurance options but aren't a substitute for professional advice. Speaking to a regulated broker gives you advice tailored to your circumstances so you can make an informed choice about your cover. Contact us for a comparison quote, and we'll put you in touch with a high-quality broker to discuss your health insurance needs.

Disclaimer: This information is general and what is best for you will depend on your personal circumstances. Please speak with a financial adviser or do your own research before making a decision.

This article was written by:
Kirsty France
Personal Finance and Healthcare Expert

Kirsty is a personal finance and healthcare expert who enjoys demystifying legal and insurance topics for a wider audience. She’s a former solicitor with a personal injury and insurance background.

Article reviewed by
Chris Steele
on
20 August 2024

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