Buck Bond Group
Update: Impacts and actions for private medical insurance benefits

Update: Impacts and actions for private medical insurance benefits

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What to do from our latest thoughts and observations?

  • Be aware that the Private Medical Insurance (PMI) industry is being faced with unprecedented challenges and that these could impact the claims and costs.
  • Take advantage of added value services under your PMI provision:
    • If you have a Digital GP included in your PMI provision, remind your people that this service is available to them for advice, consultations and prescriptions for other conditions. Though remember that the NHS is still the point of call for all COVID-19 medical issues
    • Encourage your people to use the mental health services offered by your PMI provider. Developing robust coping mechanisms now could significantly improve resilience for individuals as the situation develops and the reality of living under a pandemic sinks in.

With NHS England having struck a deal with the private hospital industry to boost capacity (at cost) – coupled with restrictions on any non-essential travel – it is clear that the PMI landscape will change dramatically for the foreseeable future. Here are some areas that we think are worth flagging at this point. The situation is fluid, and we will continue to monitor the risks and opportunities for employers coming from the private medical insurance industry.

Non-urgent elective surgeries being cancelled or delayed and services such as physiotherapy becoming more and more challenging to deliver may result in a reduction to medical claims in the short-term.

We don’t expect claims to stop altogether. Remember that, where possible, essential treatment will be ongoing – particularly for cancer which makes up, on average, about 20% of spend on corporate schemes. More and more these treatments may be directed to a home treatment environment for the safety of the patient.

We know that many, if not all, insurers are having internal discussions around how they might approach pricing in light of the expected reduction to claims. Whether this will be through payment holidays or profit share mechanisms – or indeed at all – remains to be seen.

They will need to consider the longer-term position with regards to claims. As an example, an employee who was booked in for a knee replacement next month will still likely require that knee replacement in several months’ time.

Insurers will need to ensure the long-term sustainability of their book of business. Particularly at a time when many employers, particularly SMEs, may start to see PMI as an area to make swift savings (as and when they approach their renewal date).

As well as having internal discussions about pricing and funding, insurers are looking at ways they can expand their benefit offering to members during the current crisis. Responses have ranged from opening up Digital GP services to all members, offering digital wellbeing apps, funding remote consultations with Specialists, and extending timescales for the validity of existing referrals.

It remains to be seen how long private Digital GP appointments (or private Specialist appointments) continue to be available – this will depend on the success of the Government’s measures to slow the spread of the virus, and on how the NHS copes with the influx of COVID-19 patients and the stress on its capacity.