Stakeholder healthcare system receives growing market support
Norwich Union Healthcare (NUH) has unveiled details of a proposed healthcare model, which would see the NHS act as an insurer and compete with the private sector by offering a core package of services.
Under the scheme, con- sumers would pay a separate compulsory premium for their healthcare, which would be reflected by reduced income tax rates. The premiums would be community rated, proportional to income and be allocated to an insurer chosen by the consumer. Premiums would be held in a central fund and distributed to insurers accord- ingly. A certain amount of tax revenue would continue to fund the system to meet the needs of those individuals unable to contribute.
The stakeholder model has received support from a number of organisations, including brokers and rival insurer Standard Life Healthcare. The Association of British Insurers (ABI) has also called for a wide-ranging debate on UK healthcare funding, in light of NUH's proposals.
Richard Walsh, head of health at the ABI, said: 'We need to explore how the UK mixed economy of public and private funding of healthcare can work together in the future to deliver both equity and patient choice.'
Tim Baker, commercial direc- tor at NUH, said the model paves the way for a better health service: 'The model proposes greater transparency, which does not exist under the current NHS system. People do not know how much they are paying, what they are getting or when they can get it. But if they know they are paying a set amount for a standard suite of services, they may be more inclined to use insurers for top-up services or pay for some services themselves.'
With greater emphasis placed on offering more choice to the consumer, Baker believes advisers could benefit from the stakeholder scheme. 'Stakeholder would open up a new market for intermediaries. There would be a lot of opportunity and potential in the core and top-up markets for advisers. Information and advice will always be needed,' he said.
