The increasing cost of offering private medical insurance (PMI) came under scrutiny during a panel debate at Employee Benefits’ Health and Wellbeing Conference 2010 last month.
Mike Izzard, former chairman of the Association of Medical Insurance Intermediaries (Amii), blamed rising premiums on the high costs charged by private hospital chains, and “very expensive” and “inefficient” private specialists. “Premiums have to be affordable,” he said. “If they are not affordable, employers cannot offer PMI and then the employee suffers.”
Izzard said the increased costs of PMI could be due to factors such as increasing hospital overheads and the cost of treatments and cancer drugs, as well as high levels of pay in the medical sector. Competition in the market had lessened because there were fewer PMI insurers, he said.
Adrian Norris, managing director of health and productivity at Buck Consultants, said: “PMI has been a four- or five-star product and the expectation is it is going to have a luxury feel to it. Do we continue to want to have a five-star feel to it? It is the medical treatment everyone will be most interested in.”
During the debate, Linda Hilliard, UK reward manager at Informa, expressed concern about disparities between what an employee claims for medical treatment and what the insurer pays out.
In response, Izzard said: “Sometimes it is the patient that is at fault; sometimes it is the insurer by not being transparent enough; and sometimes it is specialists and anaesthetists [who overcharge].”
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