Private Medical Insurance Growth

Despite the recession a new report by analysts Laing and Buisson states that the private health insurance market is still growing. 7,562,000 UK citizens have private medical insurance policies or trusts and this figure represents 12.3% of the population. This report contradicts other reports which have registered health insurance market decline.

In comparison to 2006 and 2007, where the industry experienced 2% growth each year, the increase last year was a modest 0.6%. Nonetheless this is a significant growth which came from individual policy holders rather than business policyholders. This sector of the business declined by 0.2% in 2008 despite a growth of 5.6% over the previous two years.

Philip Blackburn, a Laing and Buisson economist said: 'Individual purchasing of PMI held up well in 2008 as insurers offered a wide choice of policy options and budgeting, and insurers worked hard on retention, though there is a growing ‘trading down' trend, as individual spending levels remain relatively fixed while PMI costs continue to rise strongly.'

The figures suggest that people are reluctant to give up their private medical insurance. However rising health cover costs are forcing people to look at alternatives that perhaps provide less cover at a cheaper cost. Health News UK has been giving advice over the last few months on how to find lower cost policies that still offer the best health insurance cover.

According to Laing and Buisson some people are likely to drop their medical cover in 2009 as rising levels of unemployment are likely to reduce people's disposable income.

Blackburn said, 'The ongoing recession in 2009 is certain to have a more acute impact on PMI demand than the previous year as increasing unemployment across industry and services delivers a fallout in employee benefits, and downward pressures on household incomes and personal net worth (savings/investments) deliver more cautious individual spending, with reductions in many purchases that are considered non-essential. '

Drop in Health Insurance Spending

A recent report has indicated that consumer spending on private medicine is down for the first time in 20 years. This obviously has implications for medical insurance companies but if you are planning to take out health cover we may see strong competition in the near future from companies vying for your business.

The report by health analysts, Laing and Buisson, found that in 2007, £345 million was spent by patients on operations and treatments compared to 2006 where spending was £374 million: a fall of 7.8 per cent. The figures did not include cosmetic surgery figures and when taking into account inflation the drop represents just over a 10% fall in spending.

The change in consumer spending is said to be triggered by two things. Firstly NHS waiting times have reduced.

The Telegragh reported that Ben Bradshaw, the Health Minister said, 'It is a mark of the faith that people now have in the NHS that 10 per cent fewer patients chose to pay out of their own pockets to go private last year - the first fall for 20 years.

'These figures show that patients are voting with their feet. More and more people are turning their backs on paying out of their own pockets for private health care because they now trust the NHS to treat them quickly, effectively and comfortably.'

The Laing report also pinpointed the economic recession as another reason why people were turning their backs on private health insurance and predicted that spending figures would drop further.

'Economic prosperity and business / consumer confidence in the past has driven demand for private medical insurance.

'A strong and predictable business environment and high employment in particular has corresponded with solid corporate demand for health and care cover.'

The current economic climate is creating conditions where people either cannot afford medical cover or feel that they cannot. The report says,

'The recession leads to a sizeable fall in demand for private medical insurance, as employers and individuals feel the pinch, and the economy takes time to pick up again.'

Health Insurance News UK has provided many articles on the best way to secure good quality, cheap health insurance and find ways to cut down on costs by being able to compare medical insurance cover and pick the policy that best suits you and your families needs. We will wait and see how the health insurance companies respond to the drops in health care spending.

Disability and Health Insurance

There are two issues related to disability that are important to health insurance policies: firstly, the medical cover available for those with disabilities and secondly the cover provided should you become disabled whilst you hold a medical insurance policy.

Health Insurance for the Disabled

The Disability Discrimination Act 1995
In 1996, the Disability Discrimination Act made it illegal for an insurer to refuse to cover to a disabled person, or charge higher premiums, unless the company can demonstrate statistically higher risks as a direct result of a specific disability.

The Association of British Insurers (ABI), is a body which represents the interests of British Insurance companies and intermediaries. They produce medical insurance guidelines which are designed to uphold the law and protect individuals as well and the health insurance companies. Their statement on cover for disabled individuals is:

'You will not be refused cover because you have a disability. As with other pre-existing conditions, your insurer might not include cover for treatment that is needed because of your disability. However, it must be reasonable and fair for them to do this.'

In other words, health insurance companies are not allowed to deny you health insurance if you are disabled or charge you more without statistical data that would prove you are a greater insurance liability. Doing so would be considered discriminatory and would therefore be illegal. It is also important to note that we are referring here to mental health disability as well as physical disability.

What is important for disabled people is that you make clear all problems and symptoms related to your disability both current and past. This enables your insurer to assess your liability status and enables any valid future claims to go through smoothly and without dispute.


If you feel that you have been treated unfairly by a medical health insurance company there is a very clear path of complaint for you to follow. Health Insurance UK has provided complaint guidelines that you can follow.


Medical Cover if you Become Disabled

Medical health insurance is designed to provide short term cover for acute illnesses or conditions. It does not cover long term disability.

However if you have a short term disability you will be covered. Each policy is very specific in its terms and conditions. Some policies have a cost limit. Under the terms of your policy, once you have reached your policy limit you will no longer be covered. Other policies have a time limit, for example for physiotherapy treatments, Norwich Union offer unlimited in-patient physiotherapy but only 10 out-patient treatments per year.

It is important to add here that cover for psychiatric conditions is not standard on all policies and care should be taken to seek out a suitable policy if this is something that you want. This highlights the importance of really doing your homework when you take out private health insurance. Check any policy documents carefully before you make a purchase to see what your levels of cover would be.

Types of Health Cover

There are three main types of insurance which protect you against the ill health: critical illness cover, medical health insurance and long-term care insurance.

Critical Illness Cover
This is an insurance policy which pays out a tax-free lump sum should the policyholder be diagnosed with one of the critical illnesses in the policy. Each policy varies in the number of conditions it covers. However all policies will cover heart attack, cancer and strokes. Amongst other conditions which may be covered are:

Coronary artery by-pass surgery
Alzheimer's disease
Blindness
Deafness
Kidney failure
Organ transplant
Multiple sclerosis
Parkinson's Disease
Terminal illness

There will be conditions within each type of illness or condition too. For example Parkinson's will only be covered if the symptoms of it are not permanent. The same applies to cover for Multiple Sclerosis where there are often periods of remission.

Critical illness cover is sold separately but also often in conjunction with life and mortgage life insurance and costs vary depending on your sex, age, lifestyle, occupation, whether you are a smoker and your personal and family medical history.

The payout is designed to take away the financial burden of a critical illness for example any loss of earnings from not being able to work.


The Association of British Insurers (ABI) has published a handy guide to help you if you are looking for this type of cover: A Guide To Critical Illness Cover.


Long-Term Care Insurance


This covers people when they need long term care because they are unable to perform the basic activities of daily living (ADL's), for example: bathing, dressing, toileting, eating, continence, getting in and out of a bed or chair and walking.

60% of people over 65 will need some kind of long-term care within their lifetimes however 40% of people who get long term care are between 18 and 64.

With long-term care insurance you are covered for your care either at home, or in a residential or nursing home. There are three ways to fund this:

Immediate:
You pay a lump sum which entitles you to care straightaway and ensures you have care for as long as you need it

Regular premiums
You pay regular premiums or a lump sum to cover you for future long term care.

Equity Release Plans
Equity release allows you to exchange some of the equity in a house to pay for long term care premiums. This may be useful for those who have no mortgage and a low income level.

As with all insurance the cost of cover depends on your age, sex and state of health at the time you take out your policy. Generally however, State provision for long term care is considered skant so it may be a worthwhile investment.

The Association of British Insurers (ABI) has published a handy guide to help you if you are looking for this type of cover: A Guide To Long Term Care Insurance.


Private Medical Insurance


Private medical insurance covers people for their medical care during periods of acute illness.

Although the NHS provides free treatment for all citizens some people prefer to use private medical insurance. Private care can generally be delivered quicker and people also consider that private hospitals are cleaner and offer a higher standard of comfort to patients.

Payment for private health insurance is via monthly or one-off yearly premiums and cost is dependent on a range of factors including age, sex, general health and whether the customer smokes.

Costs for medical cover vary and usually the private medical insurance company pays the healthcare provider directly. However less expensive health insurance is available via Freedom, a cheap health insurance plan which gives you cash and allows you to choose your own outpatient care.

The Association of British Insurers (ABI) has published a handy guide to help you if you are looking for this type of cover: Are You Buying Private Medical Insurance?

Company Health Insurance

With everyone tightening their belts and trying to find ways to save money company medical insurance plans are looking very appealing to those who are offered them as they are very competitive in comparison to individual private health insurance policies.

Private individual health insurance premiums have risen by 8% year on year. However company health insurances have come down in price by as much as a fifth when compared to last year and now offer some of the cheapest health insurance around. Companies usually have a yearly opening for employees to join their scheme and this often includes the opportunity for spouses and children to join too. As of January 2008 there are 3m have workplace private medical insurance.

Mike Izzard, chairman of the Association of Medical Insurance Intermediaries (AMII) and managing director of Premier Choice Healthcare said, 'It’s a no-brainer really, if you are offered the chance to sign up and you need it.'

So the main advantage of joining a company scheme is that they are generally cheaper. Additionally company schemes tend to offer flat rate fees for employees up to the age of 65. Health Insurance News UK took the opportunity to compare health insurance for different age categories and found that premiums tend to go up significantly with age so if you are 55 or over it is well worth taking advantage of a company medical cover policy.

Nick Reynolds, head of intermediary sales with Norwich Union says, 'If you have an option to buy through the workplace, it is often at a huge discount. You will often be paying hundreds of pounds less compared with equivalent cover on the open market.'

Bupa are currently offering a 20% discount for companies who have not been part of a health insurance scheme within the last two years.

Another advantage of a company health insurance scheme is that group schemes take people without doing any paperwork. This is good for those with existing illnesses who may have found that individual private medical insurance was too expensive for them.

Insurance premiums can vary however depending on a company's claim history for that year and companies that focus on improving their employees wellness and employ healthier staff are likely to have lower premiums.

Newspaper Bosses Use Private Health Insurance

An interesting article published in the New Statesman on Thursday asked top UK news bosses if they used private medical insurance or the NHS. Out of the ten people only one, John Ryley from Sky News, said that they did not use any private health insurance. Other than that all those asked said that they used a combination of NHS and health insurance. Many mentioned that they were part of their company medical cover scheme.

John Witherow: Sunday Times
Uses both private health care and the NHS

Will Lewis: Daily Telegraph
Uses private health care, 'when I have to wait too long to wait for an operation.'

Gareth Morgan: Daily Star
Uses both the NHS and private health care

John Mullin: Independent on Sunday
Says that he does, 'have private health care. But I have only used it for physio when my unhealthy body gives out.'

John Mulholland: Observer
Says that he has private health insurance through work

Geordie Geig: Evening Standard
Uses the NHS but also has BUPA

Peter Wright: Mail on Sunday
Uses the NHS mainly but occassionally uses private health care

Jason Cowley: The New Statesman
Mr Cowley has been a member of a health cover scheme at his last two jobs with the Observer and Granta

Paul Dacre: Daily Mail
Said, I have used and use both the NHS and – as a member of the company’s health insurance scheme – private medicine. I am inordinately grateful to both sectors.'

PruHealth Can It Stay Healthy?

Health insurance is a business and the only way a business can stay healthy is to make a profit. This means that a private medical insurance company must charge more in premiums from its clients than it pays out in medical expenses. In other words it relies on an accurate assessment of risk. This year Pru-health has seen an 11% increase in business. But with the worsening economic climate can this be sustained?

Pru-Health's success (it's only been around since 2003 and currently has 2.5% of the market) has been attributed to its Vitality Scheme where customers are rewarded with lower premiums for maintaining a healthy lifestyle. This means that customers are less likely to make claims but equally they have to pay less for their health insurance. If they do fall ill however, the medical cover is there.

According to Shaun Matisonn’s, PruHealth's Chief Executive, the current recession could be a challenge but also an opportunity for the company:

'In many ways [our proposition] is going to prove itself even more valuable in the current climate, The pressure on healthcare costs is going to increase. Levels of demand through things like stress and poor lifestyle choices is going to drift upwards and your ability to attract and retain healthy lives is going to become even more stretched.'

Encouraging people to stay healthy will mean that their premiums can be kept lower and overall it helps the health of the nation. When asked whether improving people's health would mean that less people would be ill and hospitals would have to increase their prices (which would then be passed on to the insurance company and ultimately the customers), Matisson said, 'we don’t have any belief that we’re going to eliminate disease,' and added that,

'Some think that the only way to make your numbers work as a health insurer is to cut costs at the hospital groups. But that doesn’t create a win-win. We can create a win-win by demonstrating that we’ve got a much more sustainable base, we’ve got healthier people, and when those people do have to go in to hospital we’ll be happy to buy the best care, and the hospital will be able to do what it is good at.'

What PruHealth seem to have done is made 'wellness' part of the medical insurance business model in the UK. That can only be good news for consumers.

Earlier in the month, Health Insurance News UK reported that PruHealth had attained much of its business via people interested in its free and heavily subsidised gym memberships and that it had had to rethink its business model as the huge influx of customers had created a drain on their immediate cash flow. It will be interesting to see how they can keep their Vitality customers happy and continue to grow their business in 2009.

Monitoring Operation Satisfaction Rates

The NHS is funded with public money and for this reason there is a growing move towards making it more transparent and accountable with the ultimate aim of improving services. But as the recession deepens it is becoming more important for private health insurance companies to show that they are providing value for money both for individuals taking out medical cover and for companies who are insuring their staff.

From 2009 patients having hip replacements, knee replacements, groin hernia surgery and varicose vein surgery on the NHS will be invited to fill in a pre-operative PROMs (patient reported outcome measurements) questionnaire.

Health Minister Lord Darzi said: "While a surgeon may judge a hip replacement successful because the procedure has been performed perfectly on the day, the patient will rightly disagree if they are still in pain and continue to have a poor quality of life six months down the line.

"The beauty of PROMs is that it measures the success of operations as reported by patients themselves. This programme is the first of its kind in the world and the information collected will empower patients to choose a hospital that achieves the best results for the operation they need."

The UK is the first country to implement such a scheme. Bupa is calling for private medical insurance companies to do the same as they feel that it would provide 'fair comparisons and true patient choice.' Bupa used to use PROMs in their own hospitals.

Andrew Vallance-Owen,medical director at BUPA, said: “As a national programme this is undoubtedly the first - I don’t think anywhere else is routinely reporting patient outcomes in this way. While consumers may find this interesting, the biggest impact can be on the surgeons themselves, they are very competitive.”

Surgeons are traditionally very reticent in providing information but there is a move towards greater openness. Tim Baker managing director of Dr Foster, a health informatics company that has partnered with the NHS to produce publically available data, said that “This is not going to happen overnight. But increasingly we will get to greater levels of granularity about the information that consultants are willing to publish. It’s got to be done in some kind of cooperative way rather than forcing this to happen. But I think there is much more of a consensus emerging.”

Mr Baker warned of the need to approach the statistics sensibly and to take into account that much of the evidence provided will be subjective and anecdotal. There needs to be four dimensions to the measurement of patient care: Patient safety, outcome measures as well as patient satisfaction and patient reported outcomes

“If you don’t come out of hospital any better as an end result of your treatment, it is a nil sum game, isn’t it? Actually measuring the benefits and outcomes of treatment is important and you can do that from a clinical perspective. It’s a very important dimension of the whole quality framework.”

Currently HSA International , a group of London hospitals, offer comprehensive data but other private medical insurance companies do not have comparative data available for the hospitals they use. As more and more people access new NHS data there are likely to be calls for the medical insurance business to be more open with information about standards of care and outcomes provided by their hospitals and staff.

Clarity about the outcomes of medical procedures can only benefit the consumer whether it is within the public or the private sector and can only serve to improve the quality of care available.

PruHealth's Gym Memberships Reduce Their Profits

Private medical insurance company Pruhealth has announced a healthy balance sheet for the last six months of trading. PruHealth is well known in the health insurance industry because of its Vitality points reward system which offers reduced premiums when their customers follow a range of health measures.

PruHealth offers heavily discounted membership to gymnasiums as an incentive to improve people's health and reduce their need to make claims. However, Adrian Gore, CEO of Discovery, PruHealth's parent company, said that if the company was to become healthy is had to make changes to the gym membership scheme.

Early last year PruHealth was flooded with people joining up to their private health insurance policies in order to make the most of the reduced cost memberships. Mr Gore said 'During the first part of 2008 it became clear that a considerable number of members acquired online had joined PruHealth only for the gym benefit. And while this activity supported a low level of health claims, it created increased Vitality subsidy costs in the short term.'

Now Pruhealth offer reductions in premiums if people follow a whole range of health lifestyle activities including the following:

Flu vaccination
Pap smear
Glaucoma test
Basic health screen
Full health screen
Dental check up
Cholesterol screening
Mammogram
Maintaining blood pressure
Lowering blood pressure
Improving BMI over 6 months
Maintaining BMI over 6 months
Reading Lifestyle articles

You are awarded Vitality Points which you then use to reduce your medical cover premiums. Although private medical insurance companies do not cover chronic conditions PruHealth also offer points on the Vitality scheme when you take measures to help yourself with your condition.

Alcohol Increases Women's Risk of Cancer

Last week findings from the latest alcohol study were released and suggested that women's risk of cancer is significantly increased by drinking alcohol. Private medical insurance companies are aware of the health risks related to alcohol consumption and adjust their premiums accordingly.

Oxford University researchers found that by drinking as little as one small glass of alcohol a day a woman can increase her risk of developing cancer by as much as 6%. This represents 7,000 cases a year with the greatest risk being breast cancer. Other linked cancers were rectal, liver, throat and mouth. The study followed one million women over seven years.

The risks of too much alcohol consumption have been well documented. Sara Hiom, director of health information at Cancer Research UK, said: "We know that too much alcohol increases the risk of a number of cancers. This latest study shows that even relatively low levels of drinking increase a woman's risk. It is important that women are as well informed as possible so they can take responsible decisions over how much alcohol they drink.'

Previous research has shown more positive links between alcohol and health. In some small studies red wine has shown some protection against prostrate cancer although other studies have contradicted this. Also drinking small amounts of alcohol has been found to protect against heart disease in men and women over 40. Conversely heavy drinking will increase the risk of heart disease by a large percentage.

Overall, alcohol consumption has more negative health links than positive and it is the middle classes who are at greater risk. Recent studies showed that middle class people are more likely to be heavy drinkers (exceeding the safe alcohol limit by double) when compared to working class people. This has implications for health insurance as most people who have medical cover are from middle class backgrounds.

Misuse of alcohol is thought to cost the economy £25bn a year and there are 811,000 hospital admissions a year that are linked to drinking.

Some private health insurance companies will not cover any health matters that are linked to alcohol misuse and may not cover individuals with a history of alcohol abuse at all. If you compare health insurance policies you find that BUPA do provide cover for alcohol related symptoms in their more expensive policies under the psychiatric conditions. And AXA PPP do not cover it for individuals but do in 'group' policies. The FSA ruled that it is not necessary for private health insurance companies to include alcohol related illness as part of their exclusions therefore it is important to read the small print because what that means is that even if it is not explicitly ruled out it does not mean that you will get treatment.

So what are the government recommended alcohol limits?

Men: no more than 3 or 4 units
Women: no more than 2 or 3 units

The NHS has a useful website which explores safe limits and gives advise on safe drinking as well providing a unit calculator which helps you work out how many units in typical drink measures.

In conclusion, what is clear is that alcohol is linked to many health risks and social problems. Alcohol consumption appears to be on the increase, particularly amongst the young which makes the current statistics even more alarming. Sticking to the current medical guidelines seems to be the most sensible option for now.

Sick Rates Fall During Recession

HSA have published a report that highlights the importance of employee's health particularly in times of recession. Worryingly many people have health concerns that they do nothing about. The evidence suggests that companies need to focus on employee health and encourage their workforce to seek help, stay off when they are poorly and increase the medical insurance benefits they provide.

Increasing health cover in these uncertain times seems counterintuitive but the report suggests that doing otherwise could prove short-sighted.

One important finding was that during times of recession employees are less likely to be off sick. This may sound like a plus point however the reasons behind it are not so compelling. 76% of respondents believed that people are less likely to take sick leave over the next 12 months because they are worried about job security compared to last year. This figure grew to 81% in small and medium sized companies.

The findings suggest, not only that people are suffering from the inevitable stress that job uncertainly brings but they may also be putting there physical health in jeopardy by not looking after themselves properly.

However the report does show that companies are taking their employees wellbeing seriously. 15% of companies say they will increase the amount they spend on medical insurance provision over the next year. Of those that are worried about spending, they will not be reducing medical cover but they will be finding ways to get more for their money. 99% of companies believe that health worries can affect performance at work.

Those companies that encourage their staff to look after themselves properly reap the benefits of productivity. Those that pressure staff to return to work before they are ready have a much greater rate of staff turnover.

Companies that expect workers to continue performing basic tasks while off sick experience the highest employee turnover rates (3 times more likely to have above average turnover rates)

Also companies with the weakest private health insurance have the highest employee turnover. So, while the temptation may be to cut back in terms of medical cover, this may be short-sighted in the end.

The message from HSA is:

'We believe that if people and organisations put health to the forefront of their minds, and act to prevent healthcare problems from occurring, then this can help keep the nation fit, healthy and at work.'