Prediction of £1.1bn rise is upheld by Buck & Willis Healthcare
Buck & Willis Healthcare has refuted claims by insurers that its prediction of a £1.1bn rise in the cost of group private medical insurance (PMI) over the next five years is inaccurate.
As reported in Cover last month, the healthcare consult-ancy claims employers will have to foot the hefty bill due to a predicted 70% increase in the cost of healthcare.
Insurers were quick to criticise the prediction, saying it failed to reflect true market conditions.
However, Adrian Norris, managing director of Buck & Willis, has fought back in an exclusive letter to Cover, saying insurers were trying to 'talk down' the issue and their predictions stood firm.
'What is inescapable is the fact that medical inflation is being measured by these very same organisations as being in the region of between 10% and 11% ' the rate calculated into the projection figures. Further-more, these inflation factors are built directly into their pricing models and are often openly disclosed to corporate clients and their advisers.
'Without taking some action employers must assume their medical scheme will cost 70% more in five years' time ' and that is simply 11% inflation compounded over five years.'
He added: 'Our calculations are a realistic projection.'
Roger Hymas, chairman of Health Care Navigator, backed Buck & Willis' forecast and said a move towards self-pay would be the only way to control escalating costs in the future.
'Businesses that allow their employees to shop around for healthcare could make savings of up to 20%. The only way to control expenditure is to give employees cash to buy their own cover,' said Hymas.
AXA PPP healthcare and Norwich Union Healthcare, the insurers which spoke out against Buck & Willis' prediction in last month's issue, declined to make further comment.
