Health insurers have hit back at a Sunday Times exposé this week that claims thousands of people with private medical insurance (PMI) are wasting their money and would be better advised to invest the premiums and pay for treatment themselves.

The article claims health insurers are exploiting the crisis in the NHS where more than a million patients are waiting for operations.

But both major providers, Bupa and PPP, said the Sunday Times was missing the point of insurance. It was for customers to evaluate their health needs and consider whether to insure or self-fund.

Steve Flanagan, director of sales at Bupa, said: “You pay your money and you take your bet.”

Nye Jones, channel development manager for PPP, said the matter needed to be seen in context. He conceded that the number of people self-funding had increased, but in 1999 he said it still only accounted for 160,000 cases.

He said the growth was caused by a combination of people who had traditionally used the NHS and were now not prepared to wait for treatment, and of ex-PMI customers.

Derry Andrews, managing director of Clinicare said: “It's an old argument. Well worn. It ignores the whole concept of insurance.”

Louise Zucchi of Norwich Union agreed that self-funding was only appropriate for smaller problems. “Our feeling is that's OK until you need heart surgery or something that costs a lot of money,” she said.

People are more selective about what health insurance they take out now, said David Ashdown, communications director of WPA. This was reflected in the more tailored policies now on the market.