Combining health with wealth

11 November 2008 3:46 pm

Last week's announcement by Health Secretary Alan Johnson, which permits patients to top up their NHS care with drugs paid for privately without waiving their right for NHS treatment, could prompt more insurers to jump on the health insurance bandwagon.

And considering that pre-announcement patients were not allowed to mix private with NHS care, it would seem a likely move.

However, Healthfund chief executive Andy Dean says that Johnson's announcement stops "a long way short of endorsing a free-for-all public and private mix".

He points out that insurers are "hugely optimistic" if they think this top-up will produce a huge market for insurers to dwarf the current PMI industry premiums of £3bn, a figure revealed by Datamonitor in its February
2008 report.

He says: "Any increases in the overall market will have to be funded by premiums from the general public, who will want to see far more value for money than many get with traditional PMI products. Also, if you take the products themselves, insurers will limit these with exclusions for age, financial amounts and personal and medical history.

"I think there are definitely opportunities for insurers to provide products to capitalise on the new proposals, but these will need to be much more straightforward and transparent than traditional PMI policies and be able to demonstrate real benefits for the patients, as well as for the insurers."

Bupa UK Health Insurance managing director Dr. Natalie-Jane Macdonald welcomes the decision but is confident that the PMI market will remain "an attractive option" for customers "as it offers unparalleled amenity, speed of access and personalised care and covers all eventualities".

She says: "Top-up insurance is a much more limited offering. Certainly top-up insurance may be more affordable, but it offers people considerably less peace of mind. Essentially none of us know what will go wrong or what we may fall ill with, therefore while top-ups may be relevant to some people, they wont be relevant to all."

Bupa is now reviewing the report to understand its ramifications for patients to consider fully "how top-ups will work, rather than offer cover which is short-termist and expedient".

PMI aside, the impact of the announcement is yet to be seen, Dean points out, the industry will now have to wait and see how the new proposals work in practice".

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