Insurance-funded private health admissions reached a fourth consecutive record in 2025, with a new analysis pointing to a significant slowdown in growth that could ease the premium pressure that has made employer-sponsored healthcare one of the most challenging employee benefit lines of recent years.
According to analysis of PHIN and NHS England data by independent consultancy Broadstone, there were 670,000 admissions funded by private medical insurance (PMI) in 2025, the highest level ever recorded and 5,000 more than in 2024. PMI-funded admissions have risen 16% since pre-pandemic levels, when 579,000 were registered in 2019.
The pace of growth has, however, slowed sharply. Year-on-year growth in PMI-funded admissions fell from 31% in 2021 and 14% in 2022 to just 0.8% in 2025. Total private admissions growth followed a similar trajectory, dropping from 45% in 2021 to 0.6% last year.
"The slowing rate of growth reflects the normalisation of PMI-funded admissions following the post-pandemic surge, and signals that claims inflation is beginning to cool," said Brett Hill, head of health and protection at Broadstone. "This will come as welcome news to employers who have seen PMI costs increase in recent years due to high claims costs."
The cooling of claims growth carries direct implications for the group PMI market, which has been under severe pricing strain.
According to Mercer Marsh Benefits, 2025 was a turbulent year for UK health insurers, with escalating claims in musculoskeletal and mental health conditions forcing providers to develop more affordable solutions to counter the impact of medical inflation on premiums. Some employers reported premium increases of 10% to 25% on renewals in 2024, with exceptional cases exceeding 50%.
That pressure has been compounded by wider employment cost increases. From April 2025, the employer National Insurance contributions rate rose from 13.8% to 15%, with the secondary threshold simultaneously lowered from £9,100 to £5,000 per year, squeezing health benefits budgets at the same time as PMI renewal costs were rising.
Despite this, demand for workplace health provision has proven resilient. The proportion of employers offering health cash plans edged up from 24% in 2023 to 26% in 2025, with a further 26% considering introducing a cash plan in the next three years.
"Demand for workplace health benefits remains very much on the up, and we're seeing this on the ground as employers continue to deploy PMI and other health benefits as part of a strategy to support workplace health and reduce sickness absence," said Hill.
The easing of claims inflation sharpens the long-running industry debate around insurance premium tax on health products. IPT receipts hit a record £9.04 billion in 2025/26, with the Office for Budget Responsibility expecting the tax to raise £57.8 billion between 2025/26 and 2030/31, a £500 million upgrade on its earlier forecast linked explicitly to rising demand for health-related cover.
The industry has responded by stepping up its lobbying efforts. BIBA's 2026 manifesto called on the government to commit to no increase in IPT over the course of this Parliament.
The central argument is that taxing health insurance at 12% penalises the very product that relieves pressure on the NHS, and that a reduction or exemption would accelerate market penetration, particularly among smaller employers and lower-income workers for whom affordability has historically been the primary barrier.
The record admissions figures arrive against a shifting NHS backdrop. The headline waiting list for hospital treatment fell by 137,000 over 2025 to 7.29 million in December, the lowest level in just under three years, and fell further to 7.11 million in March 2026. Broadstone cautioned, however, that this progress may be a false dawn.
The NHS diagnostic waiting list stood at 1.92 million in March 2026, up from 1.70 million a year earlier, with the number of patients waiting six weeks or more for a diagnostic test rising by 94,000 over the same period to 407,000. Rising demand for diagnostic tests suggests pressures are building upstream in the system even as the headline treatment backlog falls.
With almost a quarter of consumers citing NHS waiting times as their primary reason for purchasing PMI, insurers are increasingly facing a structural rather than temporary shift in demand, with clear implications for product design, pricing and distribution.
The demand outlook for employer-sponsored PMI is also being shaped by government policy.
The Keep Britain Working Review, led by Charlie Mayfield and published in autumn 2025, found that over one in five working-age adults are out of the workforce substantially because of health problems, with the cost to the state estimated at £212 billion per year. The review explicitly called on employers to lead on prevention and early intervention, endorsing PMI and workplace health provision as central tools in addressing the UK's economic inactivity crisis.
Approximately 14% of UK adults now hold PMI, equating to 7.6 million people, up from 6.7 million in 2020, suggesting the market still has considerable room to grow as the structural drivers pushing employers and individuals towards private healthcare show no sign of easing.
