To the editor, I read with interest your article in the February issue of Cover, concerning Buck &...
To the editor,
I read with interest your article in the February issue of Cover, concerning Buck & Willis' forecast of rising costs for corporate medical schemes. It is little surprise that the insurers you spoke to 'talked down' the issue ' their interest is in selling products.
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.
It is true that actual inflation in the corporate sector is running at a lower rate, but the reason for this is that employers are having to make adjustments to their cover to avoid otherwise unaffordable increases. For instance, the increase in excesses and schemes using the 'network' options.
What we are drawing attention to is that without taking some action employers must assume that their medical scheme will cost 70% more in five years' time ' and that is simply 11% inflation com-pounded over five years.
Our calculations are a realistic projection. Let us not pretend there are not serious concerns over the rising cost of healthcare, either in the State or private sector.
As an industry we cannot advocate a 'head in the sand' approach ' forewarned is forearmed.
