Sovereign Healthcare's Russ Piper asks whether Insurance Premium Tax should be levied on health care cash plans.
Granted, the increase was less than anticipated, but the fact remains that the IPT rate will reach 10 per cent in October - almost a year after the last increase, from 6 per cent to 9.5 per cent.
Inevitably there has been some debate over these increases - and in particular the Chancellor's rather clever decision to link the latest hike to flood defences - but for me the bigger question is whether IPT should be levied on cash plan providers at all.
Health care cash plans, like those provided by Sovereign provide people with financial support that encourages them to manage their health proactively, by easing the cost of staying fit and healthy.
Individuals can claim tax free cash back towards everyday health care such as dental treatment, eye tests, glasses and contact lenses and physiotherapy, simply by submitting a claim form and receipts from treatment.
The benefit of cash plans is pertinent when you consider the rising cost of NHS treatment.
The cost of an NHS dental check-up rose from £18.90 to £19.70 in April, and will rise again to £20.60 in 2017/18. NHS prescriptions have also increased by £1.20 in just six years to £8.40 from 1 April.
It is no exaggeration to say that having a cash plan can be a lifeline for many customers, when it comes to affording their everyday health care.
Is it fair to add a tax to a product which can make such a difference to people's physical and mental wellbeing and reduce the financial burden on the NHS?
In addition, cash plans are designed to be used frequently, unlike many other forms of insurance.
Generally the majority of claims made on a health care cash plan are for optical and dental treatment, both of which are certain (within the control of individual customers) rather than insured events which are unexpected, such as flooding or becoming seriously ill.
They are also often community-priced, which means everyone pays the same regardless of age or medical history, and the premiums don't increase if you make a claim.
Continued increases in IPT and the ongoing costs of regulation will pose a risk to the affordability and accessibility of everyday health care for many people.
Without health care cash plans giving members an incentive to seek earlier treatment and diagnosis, there would also be extra strain on the NHS, which we know is already reaching crisis point.
We remain convinced that zero-rating IPT on cash plans would have a positive impact on all concerned.
It would align the treatment of IPT on cash plans with the majority of health insurance in Europe and would also be consistent with the Chancellor's statement that he is bringing the UK rate of IPT on to a more comparable level with our European counterparts.
More importantly, it would reduce the burden on the NHS and enable individuals to continue using cash plans as an affordable way of managing their health. And surely that is good news for everyone.
Russ Piper is chief executive of Sovereign Healthcare
Thursday 12 March
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