The health insurance industry needs to unite and offer holistic products if it is to grasp the opportunities for growth which have opened up in the past year, a major new report from Benenden Healthcare Society says.
Increasing dissatisfaction with the National Health Service, particularly with its inability to provide dental services plus the realisation by employers that health plans are essential tools for improving staff productivity and managing absences, promise a “rosy future” for the health insurance industry, the report says.
But a lack of holistic products which can provide access to treatment and help consumers with the financial problems caused by illness is holding the industry back, the report, commissioned by Benenden Healthcare, from independent financial research company Defaqto says.
The report shows the number of cash plan providers fell in 2007, while the number of plans has increased and the number of PMI providers has risen along with the number of policies.
It reveals the average weekly cost of a hospital cash plan is £3.72 for a single person; £7.07 for a couple; and £7.48 for a family. The average cash plan offers 22 benefits with a minimum of six and a maximum of 33.
The average standard PMI policy offers 24 benefits while the average budget PMI policy offers 16. The range for standard policies is from a minimum of 10 to a maximum of 37 while for budget plans the range is from five to 24.
Core services from PMI policies include costs associated with in-patient and out-patient treatment, while for cash plans the core services are contributions to the cost of routine dental and optical treatment. Cash plans also provide compensation for in-patient and day-patient treatment plus complementary therapy covers such as physiotherapy and osteopathy.
However just 19 per cent of PMI policies offer cover for routine dental treatment and only 29 per cent cover for routine optical treatment. By contrast 99 per cent of cash plans offer contributions towards optical treatment and 98 per cent offer contributions towards dental treatment.
Matthew Jenkins of Benenden Healthcare says: “There are positive signs in the healthcare industry and plenty of evidence that individual consumer demand for health insurance products is also growing. Whether it is the realisation that there are limits to what can be provided by the NHS or employers realising that they should do more for their staff there is certainly an opportunity for the industry to develop. But there remains a lot of confusion among consumers about what is and what is not covered. Consumers should be offered products that are easy to understand, affordable and deal with their key concerns. More holistic products would help as it is essential people understand what the cash plan or PMI policy will do for them.”
The Benenden report shows the average number of benefits offered by cash plans and standard PMI policies has increased in the past year. Analysis last year showed an average of 21 benefits offered by cash plans and 21 benefits offered by standard PMI policies.
The report identified 84 different individual PMI policies from 23 providers and 278 cash plan products from 30 providers.
This contrasts with 93 PMI policies from 25 providers and 282 cash plan products from 33 providers at the same time last year.