Comprehensive plans to disappear in next 10 years, predicts Think Tank
Traditional private medical insurance (PMI) policies will be phased out over the next decade in favour of self-pay plans, according to the latest COVER Think Tank.
Market experts attending the roundtable debate agreed full cover policies are likely to disappear over the coming years as the self-pay market continues to grow.
Rod Bramston, director of private clients at Western Provident Association, said the only way insurers could bring down both claims and premiums was to offer lower levels of cover.
'I do not think full cover will last for more than 10 years. When people have full cover they want to claim and you see a greater increase in usage. How do you change that behaviour? You need shared responsibility, where the customer pays a percentage of the cost. This makes a huge difference in behaviour,' he said.
Andy Sampson, head of planning and research at Legal & General, agreed: 'There is a major future in partially-paid healthcare.'
According to Roger Hymas, chairman of Health Care Navigator, the rise of the self-pay market is down to changing customer attitudes and the need for more choice.
'The self-pay market is now a £1bn market and growing. It has grown by a third over the past five years and is a phenomenon that has happened all on its own.
'People want quality and app-ropriateness ' they are asking more questions, not only on price but the best place to go for treatment.'
Many PMI providers have now developed plans with a self-pay element. However, Mike Williams, senior consultant at Watson Wyatt, said the move from full cover to more shared responsibility would not be driven by product innovation. Instead, he said, consumer understanding was key.
'As the treatment gets really expensive the insurance has to kick in. A lot of that is about consumer understanding, rather than product innovation or capability.'
The fact that treatment is often charged at a lower rate for people self-paying than if purchased through an insurer was also highlighted in the debate.
Hymas added: 'In terms of value for money, self-pay is better value for the customer than what insurers buy.'
Les Curson, partner at Nicles, agreed: 'On one hand people are paying X out of their own pocket, whereas people with insurance are paying X plus another figure. At the end of the day, private medical insurance costs must be controllable.'
