NHS threat to cheap policies: Insurers consider drastic surgery to save cover that allowed patients to avoid long waits

ONE of the most popular types of cheap private medical insurance, the six-week-wait policy, may be axed or drastically revamped.

The policies are causing problems for both insurers and patients, and the insurance companies are considering cut- price alternatives to full cover. One option would be to extend the qualification period for private treatment from six to 14 weeks.

About a million people - one-third of the current private medical insurance market - have six-week-wait cover. The policies are hugely popular and a big chunk of new policies sold are these deferred-cover schemes.

The six-week idea was first introduced 14 years ago. The scheme was designed to work in tandem with the National Health Service system.

If your consultant decides that you need hospital treatment and NHS facilities and treatment are not available within six weeks, you are covered for private treatment immediately.

The six-week plans are cheaper than conventional private medical insurance. The theory is that patients can be treated in the NHS for the urgent and often expensive treatment of cancer, heart disease, and other serious illnesses. The private medical insurers pick up the bill for non-urgent cases, such as hernias and hip replacement operations.

By using NHS facilities, the cost of claims is reduced and premiums are kept at a lower level.

At the outset everything went very well indeed. The insurers were quite happy to pay for the non-urgent lumps and bumps and patients would be treated on the NHS if they were seriously ill.

But in recent years the insurers have been paying out more and more for cancer, heart disease and other acute care, because of the pressure on and non-availability of NHS facilities.

Private Patients Plan was the first insurance company into the six-week market and is still the biggest player.

Dr Sandy Scott, general manager of the medical division of PPP, says: 'It was great for the first 10 years as the cover was complementary to the NHS. But we are now finding more and more that for cases such as cancer and heart diseases, the hospitals are saying that they cannot admit cases within six weeks. If this continues, the six-week policy will not survive in the long term.'

If insurers are funding expensive acute treatment on policies carrying low premiums, the cover will soon become uneconomic.

Penny O'Nions is a doctor and an independent financial adviser. She says: 'The problem we will see is that the cost of the six-week policies will rise to a level at which the concept would have to be totally scrapped because NHS waiting lists all exceed six weeks.

'Virginia Bottomley, of course, does not accept that waiting lists could ever reach this proportion, but I am sure that GPs around the country would agree with me.'

Julian Stainton, the managing director of Western Provident Association, the third largest insurer, says that the days of the six-week policy are numbered if insurers continue to have to meet the urgent, expensive claims.

'The policies are very popular, and do provide people with cover at reasonable rates,' he says. 'But if the claims situation continues, the policies will inevitably have to change to eight, 10, or even 14 weeks.'

Some medical fees insurers, such as OHRA, have never offered six-week policies. David Potter, managing director of OHRA, says: 'We do not like them either for ourselves or the insured. We do not see why private treatment should be tied to NHS waiting lists.

'The policies are riddled with problems, not least that people do not understand how they work.'

PPP admits that more than 50 per cent of people who take out these policies do not understand the six-week rule. It is trying to educate its members, and to simplify its six-week policy. From 1 July, PPP will cover 10 of the most common conditions immediately, without the need to refer to NHS waiting lists.

The operations include hernia repair, hip replacement and varicose veins. This extra benefit will be included in all six- week policies as they come up for renewal.

It is usually the specialists who decide whether they can carry out treatment in the NHS within the six-week period.

Mrs O'Nions says: 'If you get on well with the consultant and you want to go privately, then the rules can be wangled.'

Mr Stainton admits that the insurers rely on the consultant's judgement, and that there are inevitably cases of consultants 'bending the rules' to suit themselves and their patients.

He says: 'It may be that we will have to demand some sort of documentary evidence from the health authorities as to the actual length of the waiting lists.'

Some policy-holders have had problems with insurers insisting that each element of treatment is subject to the six- week rule.

Mrs O'Nions says six-week policies do have a place in the market, but 'people are awfully confused about them'.

It is crucial when you buy any sort of private health insurance, but particularly the cheap policies, that you understand what you are buying and that you are clear about the restrictions on the cover.

(Photograph omitted)