23 November 2016
Comment from Brett Hill, Managing Director of The Health Insurance Group on Autumn Statement November 2016
Brett Hill, Managing Director of The Health Insurance Group comments, “Today’s increase in Insurance Premium Tax (IPT) from 10% to 12% on 1st June 2017 will mean that IPT will have doubled in less than two years.
“The Government may believe that increasing IPT is a ‘soft’ option, as customers with general insurance products such as car insurance and home insurance can go to an online price comparison site and shop around for a cheaper renewal quote that might offset the effect of the tax rise.
“However medical insurance is a unique product in the general insurance market. It is the only general insurance product where customers have access to a free alternative in the form of the NHS, paid for by the tax payer. It is also not so easy for medical insurance policyholders to change insurer in return for a reduced premium. Many will have medical conditions for which they have recently or are currently claiming, and so will be unable to change insurer without losing cover for the medical conditions that matter to them the most. These customers will be faced with a stark choice, renew with their current insurer and pay higher premiums that they may not be able to afford, or cancel their policy and fall back on the NHS to pick up the bill for treating those conditions.
We all know that the NHS is going through a period of acute and rising pressure, as it struggles to cope with the twin challenges of coping with rising demand while pushing through tough efficiency savings. It is counterproductive for the government to increase the demands on the NHS still further, yet it risks doing exactly that by pushing through tax increases that could force ever more people to opt out of private medical insurance.
“Those who have made the decision to take responsibility for their own health care, and reduce the burden on the NHS, are now being penalised for having done the right thing.”