Affordability concerns drive change
There may be room in the private medical insurance (PMI) market for products that have reduced premiums for exclusions, according to Larry Bulmer, member and former chairman of AMII.
Speaking at COVER's Breakfast Briefing, Peter Lurie, director of Proactive Medical & Life, asked whether there would be a drive to discount premiums for customers with exclusions
Lurie said: "With the recession in place and with everybody having to pay national health contributions, would that be something that insurers would be looking at, or is it something that AMII or other bodies could push in terms of reducing premiums based on actual exclusions? Typically, when individuals switch policies, take out new policies and are medically underwritten, new exclusions are imposed because everybody wants to save money but they end up paying higher premiums with exclusions on their policy."
Bulmer responded: "I think, fundamentally, you make a very lucid point because risk is risk and the only long-term way to reduce the prices is by removing some of them. Removing some of the risk is to take out aspects of cover"
He continued: "It's a question of being able to drive the knowledge of not needing 100% cover into the psyche of people because I think the public think they get every cover for the same price. The Health Now fiasco was a classic example - people bought it on the principle they were buying exactly the same they had been doing. There was nothing intrinsically wrong with it - it just wasn't explained as to what it was."
