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Healthy prospects

Recent research by leading independent analyst Laing and Buisson shows that private medical insurance is holding firm.

This belies the predictions that PMI has had its day, with forecasts of it being replaced by self-pay and self-insuring alternatives.

Nearly one in five people has health and care cover products and most of those have PMI or self-insured medical expenses (12.5 per cent of the population). Stability in the PMI market may come from growth in company schemes at the expense of individual cover but it is clear that PMI is holding up against a backdrop of massively increased NHS spending and greater patient choice.

The NHS aspires to provide ever more choice but it is Government priorities and calls on the Exchequer’s purse that dictate the service delivered. Ordinary people do not like to subordinate their choices to other people’s priorities.

Healthcare is becoming increasingly consumer-driven and the NHS is struggling to catch up. Our own research has shown that people believe the NHS cannot provide free of charge all the treatments all the time. Research published this month for the Institute of Public Policy Research shows that people want, for example, to see GPs for a chest infection sooner than the Government targeted time. They want to be treated in A&E for a broken wrist much sooner than the Government’s waiting target. When it comes to an outpatient appointment to treat a non-serious back problem, they want to be seen in almost a third of the time the Government aims to deliver.

It shows that one in three people believe the NHS should provide all drugs and treatments no matter what they cost the system.

Just over one in four say they would need to represent good value for money even if they were effective and were to be provided by the NHS.

Commentators say while spending on the NHS has tripled under New Labour, it cannot continue to invest at such a high rate.

If you factor in ever increasing expectations, where people demand speed and delivery from healthcare, then something has to give.

What does all this mean for IFAs? Those who take a holistic approach to financial planning will know healthcare is becoming an inescapable reality in people’s worry list, lifestyle demands and longer-term planning.

We would not argue that because we have a state pension, retirement planning is pointless. Even though we have an NHS, people still need to take action if they want control over the treatments they need.

People are reading regularly about new therapies in areas such as cancer treatments and not all of them are made available and not always in all areas. People do not want to take that chance.

There is a simple practical reason why PMI is still important to millions of people – the idea of an impoverished retirement is anathema to the current band of fit, older people with a longer life expectancy and more assets than their forefathers.

Modern PMI that continues to offer that old PMI staple of choice over where, when and by whom to be treated is enhanced by new offerings, which cater for our national concerns about health and wellbeing.

Nutrition, exercise, stress, being cared for by our employers in an era where few employers can afford to keep losing skilled staff, are all fuelling a renewed interest in medical insurance.

PMI that does not simply ensure that we get the top-level choices we demand as consumers, and know that the state cannot provide, when we are ill, but also PMI that helps us stay well on top of looking after medical bills when we are not.

Just a few years ago, people might have said that the PMI market would struggle to grow but by reflecting people’s needs and concerns it is staying strong. As the gap between expectations and provision widens, there is considerable scope for the industry and advisers, with newer and smarter products, to continue to provide the solution to these needs.

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