Medical Inflation

Medical Inflation. Many clients of PMI and PHI policies are rightly concerned about rising premiums as a result of passing into higher age bands and medical inflation. Generally, the increasing costs of medical technology and hospital/medical costs are passed on to policyholders in the form of higher premiums. Claims appear also to be on the increase with the NHS unable to cope in many instances with patient needs and/or desires.

Medical inflation is substantially higher than the general rate of inflation. It has been estimated variously: at "between five and 10 times greater" than inflation over the early years of the new millennium by Western Provident Association; at "around 10% a year" by healthcare adviser The Onion Group; and at "about three times the Retail Price Index" by BUPA.

Among the options available to you as an individual to reduce the impact of medical inflation on your premium payments is "co-payment" where you may opt to pay anything up to the first £1,000-5,000 of care costs.

You may prefer the idea of "self-pay" which can, quite literally, mean calling your local hospital and asking for a quote. This may sound strange but it is a fact that hospitals tend to charge individuals much lower rates than insurance companies paying on a client's behalf. Or you may wish to investigate a cash plan that offers a basic payout for treatment that may or may not cover your costs.

Last Updated: January 2008 © Moneyextra.com

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