Intermediaries have defended the insurance industry’s approach to covering mental ill-health in the wake of a national newspaper branding it the “Cinderella” of the private medical insurance (PMI) world.
The Guardian newspaper made the suggestion following the case of a reader suffering from depression who exhausted the two year limit on psychiatric cover in his Bupa policy. In common with other PMI insurers, Bupa routinely restricts psychiatric benefit and a spokesman told Health Insurance that this reflected the industry’s long-standing distinction between acute and chronic conditions.
“Health insurance is designed to help people find out what is wrong with them as quickly as possible and give them prompt access to treatment,” she said. “It does not cover routine care for conditions which are, or which become, chronic, such as diabetes, which require ongoing health maintenance.”
However, she acknowledged that the distinction between acute and chronic conditions in the case of mental health can be “difficult to determine” and “confusing for members”.
“Funding treatment for mental health within benefit limits and in line with best practice recommendations for up to two years, enables us to provide treatment for our customers with mental health concerns and the timescale applicable to all helps us to be absolutely clear about the level of cover available,” she said.
Intermediary perspective
Intermediaries told Health Insurance that insurers were justified in applying the “chronic” label to certain mental health conditions.
“By their very nature, psychiatric conditions are more likely to fall foul of insurers’ rules on chronic conditions if treatment is required for any length of time,” said Brian Walters of Cheltenham-based intermediary Regency Health. “Insurers are perfectly within their rights to withdraw cover in such circumstances, although it is not uncommon for insurers to pay beyond the contractual provision.”
However, he added that clarity of cover remained a problem.
“Most insurers’ policy summaries leave something to be desired, with salient limitations conspicuous by their absence,” he said.
Bupa told Health Insurance that it had recently introduced a specialist team to give customers advice about their cover, including mental health care options.
Nick Jones at PMI provider Exeter Family Friendly believes that it is better for insurers to exclude something altogether rather than place limits on it. The insurer does not provide psychiatric benefit.
“Mental health problems are difficult from an insurer’s perspective as they can be very hard to validate and control, which can lead to substantial costs that have to be shared between all policyholders,” said Jones. “We recently asked intermediaries how valuable mental health cover is to them and their clients. The response was in fact quite negative, with many brokers stating that it isn’t an important consideration for anyone looking to take out a PMI plan.”
Walters confirmed that “very few” of his customers prioritise psychiatric cover.
“Those that do often have a history of mental illness that is underwritten at the point of enrolment,” he explained.
Corporate arena
It is a different story in the corporate healthcare arena, where mental ill-health is a leading cause of long-term absence. Paul Brantingham of Birmingham-based i2 healthcare believes that psychiatric benefit is a vital part of corporate PMI.
“I always advise clients to build in 28 days of cover,” he says. “It’s so important. I have only one or two clients without this cover and those are the ones that we have inherited. You are talking about distressing medical conditions and employers feel much happier knowing they have done the best they can for that person.”
Brantingham refutes the suggestion that psychiatric conditions are the Cinderella of private healthcare, but believes it is an epithet that could be applied to NHS treatment in some parts of the country.
“If you have psychiatric benefit on a PMI policy, you can have an inpatient environment that is hugely better than in the NHS,” he said.
He agreed with Walters, however that limits on cover play an important role.
“Without a limit you could have a situation where the claims run to tens of thousands of pounds, inflicting huge damage on the claims experience and generating a huge potential increase in cost at renewal time,” he said. “Having said that, over the last 20 years we have watched the average inpatient stay [for psychiatric patients] progressively reduce and I can recall only one client in the last few years who hit Bupa’s two year limit.”
Eugene Farrell, business development manager at AXA ICAS, part of insurer AXA PPP healthcare, said that employers could go “beyond PMI” to do more for employees.
“AXA PPP healthcare customers can offer employees access to confidential personal counselling services provided by AXA ICAS, which can help stop problems from escalating into full-blown psychological illness,” he said. “It’s worth bearing in mind that guidance from the National Institute for Health and Clinical Excellence (NICE) recommends a stepped care approach to treating mild to moderate depression that can include cognitive behavioural therapy and its online counterpart. This can be a more cost effective means of managing the condition that simply referring people directly to a specialist for psychiatric treatment.”
Farrell expects more employers to adopt this approach in future.