Advising our clients
One of the main areas of advice for Premier Choice Healthcare is to help our clients with all aspects of their private medical insurance from the initial setting up of their plan to ongoing support and renewal reviews over time. For this and the following article I thought it would be interesting to cover in some more detail the thought process that we go through when helping our clients with advice on their medical insurance.
In the first part of the article I will talk about the pricing of medical insurance plans and product benefits. Then in part two (to go live on the ‘Latest News’ tab on our website in the next couple of weeks) I will go on to run through some of the issues around which insurer we might choose and then recommend to you. Hopefully these insights will give both existing and prospective clients some context as to how the medical insurance advisory process works and encourage people to come to us and check their cover is working for them.
It is a sad fact but private medical insurance (PMI) is a relatively commoditized market. This means essentially that when we are considering either new or replacement cover for our clients we always need to take into account that as a general principle clients never want to pay more than they need to for their cover and generally when looking at a whole of market review we will compare plans with a similar level of cover and often recommend the most cost effective of these plans.
In an ideal world of course you would want a client to choose the best plan available for them but in reality most people work to a budget and there are compromises to be made when buying PMI as in all things.
There is an enormous range of product options out there (as we will discover shortly) but it is possible to distill PMI down to some core basic requirements :
Diagnostic benefits (out-patient consultants and tests/scans) and treatment (day case and in-patient cover).
Given that cover is quite commoditized, how do we translate these requirements into a coherent choice for clients?
Private Medical Insurance (PMI) Benefits
Which plan benefits are important and how does one decide what cover to include?
Historically, one way of simplifying some of the complexities of PMI product design when discussing medical insurance with clients was to classify products into three general areas:
Budget cover, mid range plans and fully comprehensive cover – often simplified as ‘Bronze, Silver and Gold’.
However, I think this is too simplistic a model and of course the more recently released PMI products (PruHealth’s Personal Healthcare ; Aviva – Healthier Solutions and AXA PPP Health Select to name but three) are modular plans with many flexible options to be had for policy holders. This means that a more satisfying and sophisticated discussion can be had with clients and in turn this of course means it is easier to recommend the best suited plan for them, in many cases within the clients ideal budget.
Modular Cover – increasing client choice
With these newer plans, most areas of the benefits are flexible and can be changed to meet exacting requirements for cover. In particular out-patient consultation and diagnostic benefits can often be changed (even totally removed in some cases) to suit different types of clients. For example we could sculpt a plan with a relatively low level of diagnostic cover but full in-patient benefits to meet a client’s particular requirement.
There are also many variants of excess both in terms of the amount you pay towards each claim and how the insurer applies the excess (per person per annum, per claim or as a type of co-payment or ‘shared responsibility’). Working just like a car insurance excess, the PMI excess is an excellent tool to keep PMI costs affordably within budget and it would be rare that I set up a new plan without an excess for clients.
A range of additional cash and health benefits can also be included within most PMI plans. Many of these ‘added value’ services can be the deciding factor if two or three insurers offer similar cover at the same price level. The wide range and variety of these extra plan benefits – some provided free by insurers and others charged at extra cost can be considered the minutiae of PMI cover but often discussion of them gives us an insight into what our clients are really looking for with their PMI. For example, a younger client who is a keen gym goer might love the PruHealth ‘Vitality’ program – an on-line system that encourages clients to engage with their health and well-being to gain discounts on related health products.
One insurer is now even offering a plan that gives the option to remove in-patient treatment altogether – once considered a vital part of PMI cover. In short we are now able to create a plan that is virtually unique to each client.
In practical terms, although the PMI plan you end up with in 2013 will do many of the things a plan you might have bought 10 years ago would have done. the flexibility of modern products means that you are no longer paying for elements of cover you don’t necessarily need, and you will have access to an enormous range of added value healthcare services.
Next time … Which type of insurer is right for you – read part two here