Page last updated at 00:01 GMT, Friday, 7 November 2008

Insurance firms eye top-up market

By Nick Triggle
Health reporter, BBC News

Patients can buy drugs privately without losing NHS care

Insurance bosses believe there is a lucrative market opening up to sell policies to NHS patients after the decision to lift the top-ups ban.

Leading firms including Standard Life, AXA PPP and Bupa are looking into the implications of this week's decision.

One firm said it could be bigger than the private medical insurance market, while analysts predicted the top-up ruling could mark a "pivotal point".

But union Unison said such developments could endanger the values of the NHS.

Health Secretary Alan Johnson announced plans on Tuesday that would mean patients would no longer lose their right to NHS care if they decided to pay privately for drugs not available on the health service.

Once people start taking out insurance en masse we risk losing the very essence of the NHS - a health service which is free and equal for everybody
Unison spokeswoman

Only one firm, WPA, is currently offering a top-ups policy.

The firm launched its product 18 months ago and now has several different options available, one of which covers cancer drugs.

Charlie MacEwan, corporate communications director at WPA, said demand so far had "exceeded expectations".

"I fully expect the other major insurance firms will become our competitors now. The potential for this market is phenomenal and could dwarf private medical insurance."

Just 13% of adults have private medical insurance and the leading firms said the opportunity to "mix-and-match" private and NHS care will lead to cheaper policies.

Paul Lynes, of Standard Life, said: "The products that could be developed will be a lot cheaper than comprehensive medical insurance so we are likely to see many more people take them up."

'Pivotal point'

As well as encouraging individuals to take out cover the firms also believe there is a huge market in targeting companies that want to offer some kind of medical cover to employees.

William Laing, of Laing and Buisson, the top market analysts for the private health sector, said: "I would expect to see action in this area. It could be that the announcement is a pivotal point."

But the manoeuvring of the insurance sector has been met by dismay from Unison, which represents a range of NHS staff, including nurses.

A spokeswoman said: "Once people start taking out insurance en masse we risk losing the very essence of the NHS - a health service which is free and equal for everybody.

"It is a very slippery slope and is why we have always warned top-ups could lead to a two-tier system."

Dr Doug Wright, head of clinical governance, Norwich Union Healthcare, said: "It is appropriate that people can choose to pay for additional treatments that the NHS does not provide but the principle of equity in healthcare is equally as strong.

"The challenge for the insurance industry is how to provide affordable cover for specific top up treatments that the NHS chooses not to make available."

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