With all the media hype over exactly what levels of cancer care and treatment the NHS will cover, Kirstie Redford investigates the different limits insurers are placing on cancer cover policies
Until recently, many cancer sufferers have been happy to receive care on the NHS. But the rising cost of new drugs and treatments is forcing many local authorities to limit treatment, leading to the postcode lottery that is covered so much in the media.
With cancer awareness at an all-time high - more than one in three people are destined to get a diagnosis in their lifetime - this bad press is prompting more people to turn to the private sector for peace of mind. But are insurers delivering the goods?
Cancer cover varies substantially across the individual private medical insurance (PMI) market, and it takes heavy duty research to confidently advise clients about their options.
Recognising how confusing it can be to get to grips with the different wordings used, the Association of British Insurers launched a consultation in April on a common definition of cancer to iron out inconsistencies and clarify the extent and limitations of each plan.
The outcome of the consultation, which ended on 27 July, will hopefully go some way to help intermediaries and policyholders compare cover more easily. But, in the meantime, it remains a bit of a minefield.
Specialist PMI broker at Medical Insurance Services, Stephen Walker, says some insurers have not made a definitive statement on cancer cover for intermediaries. "This is a major issue as they should be making clear exactly what their standpoint is. Some do take a very holistic approach and state they will cover cancer at all stages, including palliative care. Bupa and PruHealth are two insurers that promise not to pull the plug on treatment, whereas other insurers may cover certain treatments for limited periods of 12 months, for example," he says.
Bupa's deputy medical director, Dr Paula Franklin, says providing comprehensive cover for cancer takes some serious cost management. "The rising cost of cancer cover outstrips all others for PMI - especially the cost of drugs. It's a dilemma because we want to keep providing the best cover. To keep cover affordable without restricting drugs we've found other ways to contain costs, such as our MRI network. We now have a tender process that maintains quality and access but achieves more cost efficiency for services," she says.
PruHealth claims to have a headstart on competitors because its Vitality plan has attracted a healthier risk pool. According to sales director, Dave Priestley, the cover, which provides incentives for policyholders if they take better care of their health, helps keep cancer claims low.
"There is a lot of evidence that shows how healthier lifestyles can reduce the risk of cancer and this creates the opportunity to get more cover for less," says Priestley. "On individual plans we believe customers want full cover for cancer care, so there are no cut-offs when financial limits are met or if the cancer becomes secondary," he adds.
Affordability
On its standard individual PMI plans, Axa PPP healthcare limits longer-term cancer chemotherapy treatments for up to one year, or three years on its higher level of cover. However, like a growing number of insurers, Axa PPP is also trying to make policies more affordable for those more interested in cancer cover than all-singing PMI.
Its Essential Health Cover covers just three conditions - cancer, heart conditions or stroke - providing a two-year benefit limit of £250,000 for two years from diagnosis, after which the policy terminates. A 35-year-old non-smoking woman could get cover for under £8 a month.
In a similar vein, BCWA Healthcare has created a separate cancer and heart benefit module on its Personal Health Plan, which policyholders can choose to take or leave. The cover costs just over £12 a month for a 34-year-old non-smoker and allows for a maximum of £50,000 cancer cover for the lifetime of the policy.
WPA provides full cancer cover for 'active treatment' on its conventional PMI policies, drawing the line at hospice care. "We're not going to pay for post-cancer care if you have been told you are going to die and there are various stages where we need to be kept in the loop about how well treatment is working," says WPA's head of communications, Charlie MacEwan.
However, it has launched a separate policy that is aimed at providing access to cancer drugs denied by the NHS. The policy, called mycancerdrugs, was launched at the end of April and provides a £50,000 lifetime benefit for advanced cancer drugs that have been licensed by the European Medicines Agency but are denied by the NHS. Premiums are based on the policyholder's age - a 50-year-old non-smoker pays £50 a year, or double if a smoker.
The price is attractive and the policy undoubtedly taps into fears over local authorities ruling out potentially life-saving drugs for NHS patients.
However, there is some significant small print - applicants are not eligible for cover if they have had or currently have cancer, are on a medically-supervised health screening or review programme because they are considered to be at a higher risk of developing cancer, or have a parent or sibling who developed or died from cancer before the age of 60. It also imposes an age limit of 65.
Walker says this criteria narrows the market for the product considerably. "You can understand why WPA wants a clean book of business, but when you are excluding what I'd say would be two-thirds of the people interested in this type of cover, it has a very limited market," he says.
MacEwan says the policy is targeted at those who would not usually opt for a PMI policy, but admits it is difficult to project sales figures. "We saw the majority of sales in the first couple of weeks after launch and we are continuing to see some come through, but we admit we're still feeling our way with this as there are no other products like it," he says.
So is it likely other insurers will follow this trend and provide more stand-alone cancer cover options? Although no other PMI providers have announced firm plans, none seem to be ruling it out either.
PruHealth's Priestley says separating cover is a "fairly crude mechanism", but admits it does have positive attributes in that it gives people choice about whether they want to subsidise cancer cover or not.
While Bupa's Dr Franklin says it is currently researching other options to see if members find them attractive, she adds that "these could include both access to cancer-only cover and extending our proposition to help members with cancer prevention".
Steve Moody, claims manager at Norwich Union Healthcare, says it does not have any plans to produce a cancer-only product. "But that's not to say we won't in the future."
In the meantime, the provider is trying to differentiate its offering by focusing on its support service for claimants. "It's not just about the benefits - we have a dedicated oncology team to handle claims and support the customer. Our approach has a big emphasis on helping customers through the disease," he says.
However, rising costs are still at the forefront of the insurer's mind. "Drugs are not the only thing driving cost - technology is also contributing. MRI scans are now the norm, but cost 10 times as much as their predecessor the X-ray," says Moody.
Exeter Friendly Society introduced capping limits on oncology treatment back in 2002 to prevent premiums spiralling. The insurer's director of sales, Chris Barkell, stands by this decision. "This foresight has proved correct with the ongoing concerns about costs and the availability of cancer treatment under the NHS. We feel few companies can offer long-term sustainable benefits," he says.
Standard Life Healthcare's Julian Ross says it is actively managing claims to keep costs under control. "We keep in touch with claimants so we can identify when the best time is to move them back to the NHS when there is no advantage for them being treated privately for the long term. We do all of this on a case-by-case basis as circumstances can be very different," he says.
Staying grounded
Groupama also takes a 'case-by-case' approach when assessing funding. "More clarity could narrow the cover available - we try to take a flexible approach for the best interest of patients. We'd love to say yes, we'll cover everything like Bupa, but we don't believe that is a realistic statement going forward," says Alistair Sclare, head of healthcare underwriting at Groupama.
He adds that insurers are currently asking some big questions around future provision. "Cancer currently contributes to 10% to 13% of PMI costs - at an industry level this is not having a huge effect, but if it doubles in the future then it will have a very significant impact. Insurers are now asking can we afford to do this? And if we do, will it be at the detriment of cover for other conditions?" says Sclare.
With new cancer treatments emerging all the time, insurers have a tough job on their hands meeting rising costs and keeping premiums affordable. Whether this leads to more stand-alone plans, managing individual claims more closely or focusing on helping policyholders reduce cancer risk, only time will tell. But it is an issue insurers know they cannot afford to ignore.
Kirstie Redford is a freelance journalist
