With one insurer taking steps to stop providing psychiatric cover, Rachel Gordon asks how the rest of the PMI market views mental illness
It is tough at the top, and when stressed celebrities want a bit of TLC or time to sort out alcohol, drug or paparazzi problems, they head for The Priory.
Kate Moss, Paul Gascoigne and Caroline Aherne have all spent time in the plush Roehampton hospital, one of a chain of 28 successful private psychiatric clinics. Troubled footballer Stan Collymore, who was clinically depressed, claimed his stay there saved his life. Stress is eased too when, in many cases, an insurer picks up the hefty bill.
But anyone who buys private medical insurance (PMI) with Western Provident Association (WPA) on an individual basis will need to pick up their own cheque. The insurer has stopped providing psychiatric cover, with the exception of group schemes.
Rod Bramston, WPA's director of private clients, is prepared for flak but says it is the right move: 'We took the decision to get rid of psychiatric cover for our individual clients. It is the best way of keeping our policies affordable.'
Existing claims will be honoured and cover will be phased out at renewal. He adds the decision has been largely accepted with good grace: 'Mental illness is complex and long term. We were finding claim costs were rising at around 30% a year, a cost that had to be passed on to the customer.'
Bramston says offering ' as most other providers do ' limited cover was not helpful. 'If it is only for a short time what is the use? What happens when the cover runs out? Suddenly having to stop seeing a psychiatrist could make the individual feel even worse.'
He adds the vital issue is understanding what is and is not covered: 'We make our position clear in our literature and feedback showed it was not the most valued part of a policy. When it comes to cancer, for example, we are among the best and it tends to be appreciated more.'
Different attitudes
While other insurers may be reluctant to take such a cut and dried approach, most do admit that mental illness claims are problematic. Talk to any claims handler about psychiatric claims and the chances are they will break out in a cold sweat ' costs are soaring.
There are claims where an insurer will be let off the hook. Many refuse to pay for addiction problems; although at times it is less clear-cut.
AXA PPP healthcare's medical director, Dr Adrian Bull, explains a policyholder may see their doctor complaining of depression, but the root cause could be alcohol.
'We exclude lifestyle problems like drink and drugs, but it is far from easy to spot if this is the case. Even if the doctor has their suspicions, we may not be told. Claims can be difficult to manage,'he says.
AXA has one of the fairest attitudes to treating mental disease. In many cases, it does not have maximum benefit levels. 'We would not want to cap inpatient treatment levels, for example, to a month in hospital. This may be too short,' says Bull.
He adds for many policyholders, psychiatric cover is much valued and forms a key part of its top of the range Premier and comprehensive Classic policies ' it is also an option on its recently upgraded Assure budget plan.
'Although some insurers are now looking hard at whether or not it should be included, we feel our customers must be given the choice. We did take a stand recently on excluding caesarean sections from all our policies ' something being done increasingly on an elective basis,' he says.
For the intermediary, sifting through the various psychiatric policies is far from easy. Standard Life Healthcare is typical in that it excludes psychiatric care from budget plans and offers limited cover on comprehensive ones ' 28 days as an inpatient and up to £1,200 for an outpatient.
The small print is only part of the story though. The insurer's attitude to paying claims is also crucial.
Although it has been accused in the past of focusing too much on direct business, BUPA is tacitly regarded as one of the most flexible providers. Natalie-Jane Macdonald, medical director, says the insurer will 'in reasonable circumstances' cover problems linked to drug and alcohol addiction, a no-go area for most other providers.
'When someone buys comprehensive cover, we think it should be just that and we will be looking at covering as many health problems as we can. In the case of psychiatric claims, I think we have one of the most experienced teams, led by nurses with vast experience in this area, backed up by a consultant psychiatrist,' she says.
She adds BUPA will also consider providing cover for someone with a pre-existing psychiatric condition: 'It is on an individual case-by-case basis, we are striving to cover as many problems as we can.'
At AXA, Bull adds it is looking at 'risk-priced underwriting' and once introduced, this could mean previous mental health illness is accepted, albeit at a higher premium.
Knowing your options
One way of getting around the thorny issue of previous conditions is recommending a moratorium policy. But intermediaries tend to be cautious. George Connelly of Healthcare Matters, says: 'Insurers I have spoken to are concerned about the levels of psychiatric claims. They say they can go on forever and although a moratorium might be an option, they would want to clear on the circumstances.'
Larry Bulmer of broker Health Decisions, agrees: 'I have had cases where a client has had problems with stress or depression and was able to obtain cover, but the insurer would want to know the full story. If they found out it was linked to an accident or bereavement, they might provide cover under a moratorium.'
Julian Ross, senior marketing manager of Standard Life Healthcare, says: 'If someone suffered a breakdown some years ago, for example, linked to a bereavement, we would probably take a sympathetic view.'
Louise Zucchi, spokeswoman at insurer Norwich Union Healthcare (NUH), however, stands firm and says pre-existing conditions are not covered.
On most of its policies, NUH offers no cover at all and where it does this is strictly limited. On Fair + Square, it is £750 for outpatient costs only. For group schemes, psychiatric cover is more generally available. But NUH's more expensive Medios range does offer higher levels of cover, including a generous 100 days inpatient care.
Zucchi emphasises NUH, like other providers, does not pay for persistent problems.
'We are there for the acute episodes, but will pay for a range of conditions such as post-natal depression, post-traumatic stress syndrome or paranoia.'Cover also includes illnesses such as schizophrenia, but again only the acute episodes.
The main exception, of course, to pre-existing cover is to be insured under a large group scheme, where there is no individual underwriting.
Knowing when to stop paying psychiatric claims is a sensitive area especially with anorexia nervosa and other eating disorders.
Bull says AXA 'has a good crack at getting the patient better,' a stance shared by Zucchi at NUH, who says: 'We will try to nip the problem in the bud when it is first noticed.'
But the well-documented anorexia nervosa can go on for years and this can mean the patient starts off with top treatment only to find after a month or so, they are trying to obtain NHS care.
Howard Hughes, sales and marketing manager for BCWA, comments: 'Eating disorders can be tricky, but then so can many other psychiatric claims. They tend to cause staff more work.'
Certainly, insurers note that the specialist private hospitals are hugely expensive. As Hughes wryly points out, when a policy has a limit of around four weeks, the hospital will tend to recommend this as a suitable treatment period.
Psychiatric cover is never going to be a catch-all on most policies. That said, many policyholders have received prompt and first-rate treatment that has done the trick.
A new era
In come cases, insurers say their approach to psychiatric cover is evolving. Ross says: 'We are developing a new approach by working closely with some consultants. Although it is not yet officially on our policies, we are now more flexible. In many cases, outpatient is where there is most need and so we will pay more for this.'
Broker Hazel Berrill, managing director of Medical Insurance Services, says she views psychiatric as a vital part of any PMI policy.
'I would like to see insurers offering wider cover. They will often only pay for psychiatry rather than psychology for example, but a combination of both could be needed. The stigma of mental illness has faded and it is now common. Quick treatment has the best chance of working and it can be useful having tests done privately as well ' sometimes mental problems can have physical symptoms that need checking out. Claims are difficult and I know insurers are concerned about rising costs, but there is definitely a need and a good private medical insurance policy can be one of the best ways to help someone bounce back.'
Rachel Gordon is a freelance journalist
