Herceptin launch could push up cost of private medical insurance for employers

Employers that provide private medical insurance for their staff may need to prepare for increased costs from next month as Herceptin – a drug being used to treat early breast cancer – is launched, according to experts.

In July, the National Institute of Clinical Excellence will complete its licensing of Herceptin for use within the NHS and, as a result, most insurers are expected to extend their cover to include this drug treatment, unless specific exclusions are made.

Consequently, private healthcare costs will increase by up to £35,000 for each employee who is treated, according to Mercer Human Resource Consulting.

“The news that Herceptin will be covered under the NHS will be a welcome development for many cancer sufferers,” said Stephen Clements, principal at Mercer.

“While some private medical insurers currently cover Herceptin treatment, the majority are expected to follow suit with the NHS and extend their policies from next month.

“Employers may then find themselves having to choose between accepting the change, requesting a specific exclusion or choosing a different, more restricted plan option,” he added.

As well as emotive pressures, employers could face potential discrimination claims if they specifically exclude Herceptin treatment from their plans, so few will feel in a position to do so, Clements said.

“Even though the drug will be available through the NHS, it will be difficult to justify not covering it in a private plan without making alternative provisions, when other, less serious illnesses are included and when short waiting times are crucial,” he said.

Depending on the make-up of their workforce, some companies could see higher than average cost increases and so should budget accordingly, Clements advised.

However, worries that company medical insurance premiums could rocket following the approval of Herceptin are largely unfounded, according to a medical expert.

Nicky Crystal, who specialises in corporate healthcare at SPS Wellbeing, said concerns over premium rises had been “over-hyped”. She said a combination of factors would limit the impact of claims in the corporate sector.

“Many sufferers of breast cancer are over 50, which means fewer staff are likely to need the treatment,” Crystal said. “Also, there are unlikely to be many claims in total, and corporate premiums are based on claims history and not the total number of claims made across the market.

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