Medical Care Information

By Mouzzam Devraj Atiq

By John T Hughes

Medical insurance premiums are affected by a number of different factors. Inflation is the main offender when it comes to rising costs. It affects household budgets, energy prices and luxury goods, right through to insurance premiums. Medical premiums in particular have risen most sharply in recent years – almost at twice the rate of normal inflation and for a number of reasons. Not only have consultant fee’s risen, but the base cost of medical treatments such as equipment and drugs have also – and they’re likely to keep on rising. Cancer treatment for instance, which some private medical insurance policies cover, is predicted to rise by 65% over the next decade.

Couple this with the world population which has grown at an astonishing rate over the last 100 years, putting a growing strain on our health care systems. We’re also an aging population living longer than ever before. The average life expectancy of men and women in the UK currently stands 78.2 and 82.3 years respectively. That’s 8 years higher than in the 1970s. Whilst it’s great that we’re living longer, it means that more of us requiring health care, and more frequently.

Unfortunately, the way we are living is also exacerbating the system. Our modern lifestyle choices mean that we are exercising less, eating more unhealthily and probably washing it all down with too much alcohol. Often, this will lead to health problems such as obesity and illnesses such as diabetes which will ultimately require hospital treatment.

Finally, huge advances in medical treatments over the last couple of years have also pushed up costs. Although more of us may be suffering from serious health conditions, these medical advances mean we are no longer dying from them. Now, certain drugs can help patients control illnesses preventing death or at least prolonging life. This ongoing treatment however, comes at a cost. Figures from 2007 show that the US pharmaceutical industry spent nearly $60 billion on drug research and development but only 2 out of every 10 drug of these drugs which make it onto the market produce enough revenue to match their research or sale costs.

All these increases consequently means that health insurance premiums are going up. Talking to the Sunday Times, health care expert Keith Pollard said: “A combination of an older population and higher costs for new medical treatments is pricing many people out of private medical care all together.” Although latest figures from analysts Laing & Buisson in 2010 show fewer people are taking out medical insurance, there are still 6.5 million people in the UK have private medical insurance. 2.9 million of these are employer-funded policies. So although prices are on the rise, there is still a large number of people who want to take advantage of these medical advances and treatments that may only be available through private medical institutions.

Customers can still obtain competitive deals but need to be aware that some medical insurance providers are lowering premiums by increasing excesses. Insurers usually charge around £50 per claim, but providers with higher excess may charge up to £2,000. Opting for a higher excess can reduce monthly payment costs significantly. Consider how comfortable you are sacrificing a lower premium for a higher excess.

Savings on premiums can also be made by tailoring your contract – known as a ‘modular’ policy. This means that you can customise your level of cover. For instance, a policy which does not include physiotherapy or cancer treatment could cost a lot less than a fully comprehensive one. This means weighing up your financial options and whether you can afford to risk certain elements of a policy. Searching for tailored private medical insurance can be both time consuming and confusing and it most cases may be most efficiently done through an independent private medical insurance specialist.