Refunds for Policyholders in Health Insurance
Many private medical insurance policyholders are still waiting for rebates that they were promised after COVID-19 disrupted private medical provision, leaving customers frustrated. Now, some health insurers are postponing payments to 2022, potentially making customers wait for roughly two years before seeing any refunds on compromised health services.
One of the key triggers prompting UK customers to purchase private medical insurance (PMI) is concerns about NHS waiting times / services. GlobalData’s 2020 UK Insurance Consumer Survey found that 20.4% of individuals who purchased a PMI policy had done so for this reason. Yet the COVID-19 crisis also led to difficulties accessing private healthcare, compromising the quality of services offered by private medical insurers. The delays of non-critical private medical care would have left customers feeling that their policy had lost value, particularly given the incidence of individuals purchasing PMI to avoid holdups on healthcare treatment.
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In recognition of reduced services, the leading private medical insurers pledged to customers that they would offer them rebates on any profit made as a result of fewer claims. Soon after the pandemic took hold, WPA offered customers two rebates – each equating to around 40% of their PMI monthly premiums. Bupa paid customers rebates in April 2021, more than a year after the start of the pandemic. But policyholders from other insurers are yet to see similar refunds. Large insurance names such as Aviva and AXA, having announced they would make such payments at the onset of the pandemic, have postponed rebates until 2022. AXA expects to make such payments by March, while Aviva’s customers will have to wait until the end of the year.
Health insurers now expect that the period of low claims will be followed by another period of high claims as private medical care catches up with delayed treatment. However, prolonged waiting times to receive payments could leave customers frustrated, potentially making them feel that they are overpaying for their insurance, or that their policy has lost value since the pandemic.
The irony is that the prospects of joining the NHS’ overstretched waiting list will prevent those with PMI from cancelling their policies, even if they are less happy about them than they used to be. After all, the COVID-19 pandemic has also swollen the NHS’ waiting list, with more than 5.6 million people waiting for routine care, which further increases the need for private healthcare.
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