“Our PMI renewal went up again this year…” Sound familiar? You are not alone. Many employers are facing sharp increases in the cost of Private Medical Insurance (PMI) — often well above inflation and, in most cases that I have seen, a starting increase of 15% is often deemed good!
PMI remains one of the most valued employee benefits, but keeping it affordable is becoming a real challenge. So, what’s driving the rise — and what can you do about it?
What’s behind the cost increases?
- Medical inflation: New treatments and drugs are great for patients, but they come at a price — and who pays for it? The consumer, of course.
- Increased usage: More employees are claiming, especially for mental health and diagnostic support. I like to compare PMI to ‘turning left on the plane’. If you’ve ever been in the fortunate position where you’ve been able to turn left on the plane and travel in business or first class, and money wasn’t an issue, why would you ever not travel the same way? With PMI, you can have an appointment at a time and date that works for you, have your own room with a nice view, TV on the wall and nicer food than a traditional hospital. Why would anyone not want this?!
- An ageing workforce: Older demographics tend to mean higher claim costs. We all know that people are living longer and therefore working longer, with older employees statistically likely to claim more.
There are ways to manage increasing PMI costs, however some of these could only be short-term stopgaps. I have listed some of these below:
- Review your scheme design: Adjusting excess levels, outpatient limits, or offering modular options can make a big difference. However, if at every renewal you are taking a benefit away from the policy, at what point does the policy become worthless and of less value to the insured employee?
- Use data insights: Obtaining claims data is not always possible due to GDPR, however if you can spend time analysing claims trends it may help you target cost drivers and refine your benefits accordingly.
- Try hybrid solutions: Combining PMI with a health cash plan keeps support broad while containing costs. Often employees feel that this may actually deliver better value due to the tangible benefit of a cash plan.
- Benchmark regularly: Never assume that your current insurer offers the best deal; a market review can uncover better options, and we would suggest that a biannual review will ensure that you’re keeping your current provider on their toes!
- Engage your employees: On the face of it, this may sound counterintuitive; however, educating staff to use virtual GPs, network providers, and NHS pathways where applicable can help control unnecessary claims.
For me, however, the biggest area to work on is to focus on prevention. Whilst this may increase initial spend for an employer, delivering and supporting wellbeing initiatives, early intervention and proactive health assessments or health checks should deliver positive outcomes in the long term.
It’s important to remember that PMI doesn’t have to be all or nothing. With the right strategy, you can protect your budget and, most importantly, your employees’ health.
If you would like to speak to a specialist in the area of PMI, please feel free to reach out to the team at Wingate on 01883 332260 or at info@wbs.e-innovate.dev.
