Private medical insurance uptake on the rise despite higher costs

The number of people now covered by private medical insurance (PMI) rose last year, despite the cost of providing health benefits to employees and the number of claims being made both increasing.


Figures from the Association of British Insurers showed that the number of people covered by private medical insurance rose in 2008, despite the UK economy going into recession.


A total of 6,224,000 people were covered by either personal or corporate PMI, with a further 1,111,000 covered through healthcare trust arrangements. A total of 7,335,000 people now had some form of private health cover in the UK, an increase of 2.7% on 2007. This is despite the fact that separate figures from consultancy Mercer have suggested that the cost of providing health benefits to employees rose by 4% in 2008, above the UK inflation rate.


The Mercer Medical Inflation report also found that medical insurance claims increased by 3% in 2008, claims costs continue to rise, and that there was increased evidence of cost-cutting being discussed by employers in negotiations with insurers.


Bupa UK Health Insurance director Fiona Harris said the ABI figures reflected the impatience many employers, as well as staff, still felt with 18-week NHS waiting lists. “In today’s instant access society, where you can order your shopping online with same day delivery, waiting 18 weeks – or almost four-and-a-half months – for treatment is just too long,” she said.


Fears over superbugs, such as MRSA and C.difficile, and the general cleanliness of NHS hospitals were another factor.


PMI was also rising up the corporate agenda as employers were becoming more prepared to take responsibility for their employees’ health and wellbeing needs, with the benefit now second only to a pension as a desirable employee benefit.


But the way health benefits were taxed remained an obstacle, she added. “Our own research of corporate clients shows that nine out of 10 employers want to see support from the government. Half would invest more in employee health and wellbeing if there were financial incentives to do so,” said Harris.

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