UK health insurance rates to rise on rising claims

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LONDON, Nov 30 (Reuters) – Health insurance rates in Britain are likely to rise by at least 20% next year due to a rise in the number and cost of claims, industry advisers said.

British employers are expanding the use of company health schemes as the country’s National Health Service struggles to meet patient demand in the wake of the COVID-19 pandemic.

A record 4.4 million people are now covered by health insurance through their employer, according to the Association of British Insurers, while waiting lists for hospital treatment in England hit a record high in September. The target for treatment within 18 weeks has not been met since 2016.

“Where in the past, PMI (private medical insurance) used to be considered a back-up, it has become the main point of access to the health care system,” said Luke James, a senior consultant at Mercer Marsh Benefits.

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Major UK health insurer AXA ( AXAF.PA ) said earlier this month it expected “headwinds” from a higher number of health claims in Britain. AXA declined to comment further.

Aviva ( AV.L ) declined to comment and Bupa did not respond to a request for comment.

Britain’s individual and workplace health insurers will pay a record nearly three billion pounds ($3.74 billion) for claims in 2022, an ABI spokesman said.

Employers are reluctant to offer health cover, as delayed treatment can lead to illness and loss of productivity, industry advisers say.

Premiums – which generally take inflation into account – for individual and workplace policies combined have risen by less than 2% between 2019 and 2022, an ABI spokesman said.

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But with the costs of medical staff and services rising faster than general inflation, higher take-up of online doctors and more expensive care including new cancer treatments , premiums are rising, advisers say.

Some workplace health insurance schemes have posted rate increases of more than 40%, James said.

“The market is nervous, we’re in an unknown phase and insurers don’t like the unknown,” said Rachel Western, a principal at consultants Aon.

“It’s a difficult risk to predict.”

Tim Cowan, senior partner at insurance broker Anderson Health, is among those who have seen a post-pandemic increase in demand for private mental health services, including expensive psychiatric hospital care.

In addition, the enduring popularity of remote work may lead to more claims for back problems, said Juan Serey, private medical insurance advisor at broker Secure Mortgages and Protection.

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For 2024, Mercer Marsh Benefits predicts the medical trend rate in Britain at 11%, compared to 3% for general inflation. This rate reflects medical inflation along with changes in treatment, use and regulation.

But insurers are experiencing higher inflation, some consultants say.

Employers are starting to ask how they can deal with rising insurance costs, says Brett Hill, head of health and protection at consultants Broadstone.

This could lead to employees paying a flat fee such as 100 or 250 pounds for an initial consultation with a private online doctor, or companies offering health screenings to identify medical issues before they get worse. , he added.