A stark warning from industry experts – rising cost of individual PMI means it could become unaffordable for many.
Industry experts have warned the rising cost of individual private medical insurance (PMI) is strangling the market. The cost of PMI has risen 40% over the last decade. While corporate PMI is doing well, it seems individual PMIs are falling behind, noted Mark Noble, health and group risk director at Aviva UK Health.
Speaking at the Association of Medical Insurance Intermediaries Annual Private Healthcare Summit, Noble said, “The individual market has shrunk significantly, and unless we get a hold of rising costs I think this will be a huge challenge for us going forward.”
If the cost continues to increase, PMI could soon become “unaffordable” for many people. Going forward, insurers need to focus ways to keep costs down in order for PMI to be attainable for most people.
While different cost limiting strategies apply to the individual and corporate markets, they have some things in common. The introduction of hospital networks and “open-referral” system, which gives insurers more control over which consultant can treat their individual member are two examples.
Noble said to delegates, “I think that hospital networks and open referral is the way the market has got to go. That will be really difficult for some people because it is going to reduce choice, but otherwise costs are going to run away from us.”
Not all doom and gloom
A speech from Wayne Pontin, chairman of the Association of Medical Insurance Intermediaries (AMII), painted a more positive picture of the PMI market. He told delegates, with waiting times in the National Health Service (NHS) increasing and some NHS trusts falling into administration never has there been a better time for the private sector.
Urging private insurers to provide products to top-up and complement existing public health services. Pontin said, “We need products and services that top up NHS services from the private sector, and we need the government to consider preventative healthcare initiatives.”