THE RECESSION caused the number of people covered by private medical insurance (PMI) to fall from a peak of 7.5 million in 1990 as companies made employees redundant and individuals tightened their belts. More than six million people remain covered and the market is growing again, if slowly.
Bupa, market leader with 46 per cent share, enjoyed a resurgence of enquiries and new members last year. Shaun Astley, director for member services, said demand was coming from new quarters with young people now joining straight out of university. "Healthcare is being pushed up the dinner party agenda. It is being talked about because of the changes in the National Health Service," he said.
New recruits are opting for new products. Bupa, in common with other medical insurers, has diversified its range of products in recent years to appeal to all ages and all income brackets. The most popular options are LocalCare and excess clauses, whereby the subscriber agrees to pay the first pounds 100 or so of medical bills before insurance kicks in. LocalCare ties a subscriber to treatment in a specified local hospital and cuts the price of the policy by about 15 per cent.
Mr Astley said consumers were becoming more discerning about medical insurance. Some 1,500 to 2,000 Bupa members switch to other Bupa policies each month, some going up and some down the price scale.
The proliferation of products and entry of new players has led to a market with some 30 insurers offering more than 400 variations of PMI. The market is still dominated by Bupa and Private Patients Plan with 28 per cent share. Although some insurers have quit - most notably London and Edinburgh and Eagle Star - new ones are still entering. Clinicare linked up with a French insurer, Strasbourgeoise, to market three new plans last June and Cornhill joined the fray, via brokers only, in September.
Stanley Browne, managing director of Private Medicine Intermediaries, the Cheshire based independent healthcare adviser, believes the arrival of new insurers is very healthy. Continental insurers have a good track record of writing health insurance so that the premiums do not rise precipitously, he said. He adds that insurers have come closer to meeting the needs of the market in recent years, particularly through the introduction of helplines allowing subscribers or would-be subscribers to ask about existing medical conditions or other areas of uncertainty.
The choice available to consumers is wide. In the de luxe bracket is Clinicare's Carte Blanche. It is unusual as it is designed to be used for health maintenance purposes rather than as a conventional insurance product. As well as in-patient care it covers primary care including dental and opthalmic fees, spectacles and contact lenses, alternative therapies, private GP fees, prescription …