Health check shows lack of innovation.
New cancer drugs, stem cell breakthroughs and genetic mapping are just some examples of the dramatic advancements in medicine over the last few years. So why then is health insurance still stuck in the Stone Age?
Health insurance leads a funny sort of existence, floating in no-man’s land between life and general insurance. On the life side it gets slammed because it’s seen as a more transactional product that can’t keep pace with the retail distribution review’s (RDR’s) move towards fee-based advice as seen with investment products.
Meanwhile, somewhere in the middle of life and GI is the issue of a moratorium on disclosure of genetic tests until 2014 – in the best interest of consumers no doubt, but still behind the times when it comes to keeping pace with innovation.
And on the GI side, there’s a growing battle over claims sharing in the private medical insurance (PMI) arena for small and medium-sized enterprises (SMEs). PMI for SMEs is the one area where a policyholder’s claims history is not routinely shared between insurers and brokers.
Groupama says it’s the lone insurer to regularly disclose claims history to brokers at renewal, thus allowing its policyholders to use the data and shop the market for the best rate. Groupama’s position is backed by the British Insurance Brokers Association (Biba).
Groupama and Biba also suspect that some large brokers are getting this claims information because of better bargaining power, while some smaller brokers are being put at a disadvantage.
But most insurers refuse to share such claims information, and argue the opposite – that it’s in the best interest of consumers that claims data remains private. They say if an SME has only a handful of staff and its premiums are based on experience (claims) rating, than any claim would have a more volatile effect on premiums compared with a larger company.
A joint statement from the Association of Medical Insurance Intermediaries and Biba sent out Monday said that transparency of claims might help SME clients secure the best terms for their scheme. But they added there are data protection and competition issues to consider – especially when dealing with SMEs and the disclosure of personal medical information.
The first Transparency of Claims meeting held by the AMII and Biba last month was a positive step in working towards a resolution. Let’s hope the next meeting planned for spring results in some proposals.
