Health insurance makes me sick

Rather like age and weight, my annual health insurance premium is a number I would prefer to ignore but I probably should not. A few of weeks ago, I received an email confirming this year’s health insurance premium and as usual, I ignored it. Renewal is automatic and I have other boring chores to do under lockdown.

Now, I have tidied my office, turned out cupboards, sent the car for its MOT, cleaned out the fridge and ordered more fizz online than I know what to do with. I have even delved deeper into the list of bores that rarely get done to beat lockdown tedium.

I have checked the services that automatically renew to see if they are out of contract or require a switch and ended up changing my energy supplier and saving £400 per year in the process. I also realised that BT raises its prices by CPI plus 3.99% every March so if you are not careful, you will be paying more for their broadband and phone line than you might for a complete entertainment and telecommunications package from almost anyone else.

I was also able to change my mortgage deal and secured a three-year deal at 1.2%, saving another large dollop of cash! Oh, I am also due a free mobile phone upgrade, what a roll! I wonder where that health insurance renewal email is?

When I did eventually find the offending communication, I was horrified.

The annual quote was £4,376, a massive increase on last year’s already wallet-draining £2,620. Outrageous! I rang my insurer’s renewal helpline to diagnose what on earth was going on. Surprisingly, the premium increase was nothing to do with my age or weight. It was because last year, for the very first time, I had used my health insurance for the reason it was intended, I had made a claim for private treatment.

I will not go into the details here but a long term ‘back problem’ had not been resolved with physiotherapy and I was sent off for an MRI scan. It turns out one of my lower discs is damaged. There were various treatments I could have pursued, involving scarily large needles and lumbar injections that were not without risk. I chose not to. The advice was that the best treatment was to go on a diet!

It turns out the ‘C diet’ that I gravitated towards, where you see food and eat it, is not the one to go for. During the pandemic, I have been forcibly separated from all my favourite restaurants, and have kept trim by taking long walks, playing golf (until lockdown arrived again) and putting out the bins.

Anyway, back to the diagnosis of the hefty bill. The adviser explained that because I had the audacity to make a claim of £305 for an MRI scan, this had caused my annual premium to inflate by nearly six times that amount. However, if I did a ‘no claim buyback’, that would reduce my annual premium. In other words, if I swallow the £305 cost of what the health insurance was supposed to pay for, I would retain my ‘no claims’ bonus and get to renew my annual cover for a similar sum. This proved to be correct but amplified my disgruntlement.

Striking out the one claim I had needed to make, I had basically paid nearly £3,000 for services I would have been largely unable to access due to the coronavirus. So what about a refund?

Back in June, the Financial Conduct Authority provided guidance that insurance products must provide appropriate value and take action where there has been a fundamental change in risk or where certain benefits can no longer be provided. Indeed, my renewal stated that services unavailable during earlier lockdowns were back on stream.

Undeterred, the call centre guy directed me to a statement on the company’s website, where my insurer’s Chief Executive stated they would only provide a premium rebate if claims had been lower! Not happy but it got me thinking.

What on earth is the point of having health insurance if claiming is more expensive than paying as I go? Is it only there for when I need a really massive job doing? In which case, would I be better to save on the premiums and cough up if needs be?

I am acutely aware of these costs as it is something most of our clients have to finance themselves. If you get health insurance via your company, you might be less aware but you really should be. Of course, I could shop around for a better deal and find out just how much I am overpaying. This works well for car insurance, broadband and mortgage provider.

While I might save a few hundred quid if I switch to another health insurer, it seems it is not that simple. Unlike car insurance, as you get older, the more expensive and limited your choices will be and if you have previously made a claim for a particular condition, that will be excluded from your cover!

Reluctantly, I decided to stick with the same insurer but the whole experience has left me feeling rather sick (not ill). However, the while episode does leave me with a bad taste and determination to seek out those insurers who play fair. There are plenty out there and if you need any assistance with this, do not hesitate to contact your Prosperis adviser by calling 01423 223 640 or email us below.