Private health insurance takes a dive
Private health insurance has suffered a record slump in demand, because the recession has forced employers and individuals to cut back on the costs of cover.
The number of people buying their own health policies has fallen to the lowest total since the 1970s, according to analysts Laing & Buisson.
The trend has also hit dental insurance – there was a 2% drop in the number of subscribers to stand-alone dental benefit plans last year, in stark contrast to annual growth of 31% in the preceding three years.
With sluggish demand for both medical and dental insurance forecast to continue, more people will be turning to the NHS at a time when it is facing tough spending curbs.
The survey shows that the number of private medical policies fell 4.8% in 2009, after marginal growth of 0.6% in 2008, as the recession took hold. Employer-funded policies fell 4.7% and individual policies dropped 5.2%.
The number of people covered by such policies is put now at 7.2 million, or 11.7% of the population. Of these, just over a million buy their own insurance, the lowest figure ever recorded by Laing & Buisson.
Around 3.3 million people subscribe to stand-alone dental plans. These grew rapidly in popularity in 2006 (up 31%) and 2007 (up 10%) and were still growing in 2008 (up 1.5%). Numbers are now falling, however.
Laing & Buisson says the drop in demand for medical insurance in 2009 was the biggest it had seen in almost 30 years of monitoring the market.
Given the depth of the recession, however, a fall of some 5% could be seen as a sign of product strength. “Certainly, private medical cover retains its popularity with employers,” said Philip Blackburn, author of the survey report.
The market was “likely to remain subdued for some time”, Blackburn added, although people might be attracted back if waiting lists for NHS treatment started to rise sharply once again.