UK private medical insurers under pressure to refund payments


Private medical insurers are under pressure to suspend or refund payments because of the difficulties in accessing private healthcare services during the Covid-19 crisis.

Although almost all non-critical private medical care was stopped during the coronavirus lockdown, customers have continued to pay insurance premiums that average around £600 a year. 

Access to private healthcare is still restricted as the NHS has requisitioned nearly all of the sector’s capacity and limited access to only those in desperate clinical need in a deal that may be extended until the end of August. 

Although there is a small increase in private work, it is well below pre-pandemic levels. There are also concerns that people will continue to struggle to access private healthcare over the next year as the NHS continues to use private facilities and capacity is restricted as a result of increased safety protocols.

Last week, the Financial Conduct Authority said it expected firms “to communicate clearly with customers where they have identified an issue that may adversely affect the customer, and any actions they are taking to address this”.

The not-for-profit insurer WPA has provided a customer rebate worth around 40 per cent of monthly medical insurance premiums during the crisis, promising another one for the end of June. In a letter to customers it said that it had received far fewer claims than usual “and so we want to provide a tangible rebate now based on what we are observing”.

For example, a 40-year-old customer with comprehensive cover living in Reading paying £82.99 a month received £35.

But most insurers have not suspended payments or offered rebates. Bupa, Axa and Aviva have all said that they would review the issue next year when the impact of Covid-19 is more clear. However, Axa PPP has raised payments to customers who choose to be treated by the NHS by £100 per night. 

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Aviva said it expected treatment to be “delayed rather than cancelled and we anticipate overall claims costs subsequently to be higher. We would expect the period of lower claims to be broadly offset by the period of higher claims.”

Bupa said it expected to give a rebate once “the likely impact of the Covid-19 crisis is clearer”.

The Association of British Insurers said insurers had continued to provide remote services such as online GPs. It added that it expected the value of taking out PMI to be highlighted later this year when the waiting list is expected to grow to 10m people. 

Healthcare in the UK is funded through general taxation but patients can also beat long waiting lists by seeing NHS consultants who also work in private hospitals. 

About 40 per cent pay through private medical insurance, mostly provided by employers, and a further 30 per cent are paid for by the NHS through the “choose and book” system, which allows people to choose to be treated in a private hospital at the state’s expense. A growing number pay for private treatment on a case-by-case basis.

Gareth Shaw, head of Money at Which?, the consumer lobby group, said insurers should act quickly to address the issue as “the circumstances created by the outbreak have meant that some customers are no longer getting the level of cover that they are paying for”.



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