Tax relief should be opened up to prevent private medical insurance customers in their 60s lapsing their policies following rising insurance premium tax (IPT) costs, the chairman of AMII has urged.
Speaking at the AMII Health and Wellbeing Summit 2015 on Monday 16th November, Stuart Scullion said: "An increase in IPT is an ill-conceived and ill thought through tax increase which will put both further financial and operational pressure on the NHS.
"The IPT increase is estimated to raise an additional £177 million per annum in revenue. If I look at our own business cost is the single biggest reason the cancellation of policies in the 60+ age category. Propensity to claim and the cost of those claims is at an increasing level. "
The rate of IPT was increased from 6% to 9.5% from November 2015 resulting in higher private medical insurance premiums as insurers were unable to absorb the costs.
Scullion warned that as a result, the impact will be to "drive people back to an already overstretched NHS."
He added: "While they do not necessarily wish to be treated in the NHS, if they are unable to maintain their private PMI through cost many will have no option but to fall back on the state system. I would predict that the financial cost of treating those people through the NHS will equate to more than three times that of the revenue gained.
"David Bennett, the outgoing director of Monitor, who have a responsibility towards foundation trust hospitals, said that the NHS may have to look at alternative sources of funding as the public were close to the limit of how much they are prepared to pay [in tax]."
Scullion concluded: "The Chancellor may have been better advised to reintroduce tax relief for the over 60s and reduce the burden on the NHS as one option open to him."