With stress-related illnesses becoming more commonplace, Peter Madigan asks what mental health cover is offered by private medical insurance providers
Private medical insurance (PMI) providers have offered psychiatric care as part of their comprehensive plans for several years. Indeed, advisers and insurers report that PMI with psychiatric care included sells in greater numbers than plans without. Admitting to mental health problems has become less stigmatised and as employers are more aware of their obligations regarding employee benefits, providers could be on the brink of seeing a surge of new business.
Acute conditions
Research by Norwich Union Healthcare has indicated that one in three GP appointments are related to depression. The survey also estimated that there are 12 million people suffering from depression in the UK, of which more than six million are taking antidepressants. With the average wait for access to a counsellor on the NHS being around six months, more and more people are considering PMI.
"The first thing they have to consider is that private medical insurance is about treatment; it is designed to cure acute illnesses or injuries," says Paul Brantingham, managing director at Integra Healthcare. "Some serious psychological conditions such as schizophrenia that can be controlled by drugs are not covered under PMI policies as it is a chronic condition that requires management and is not treatable."
Generally, the acute conditions covered under most PMI plans include depression, eating disorders, severe anxiety, obsessive compulsive disorder and phobias. If any of these conditions are pre-existing at the time the policy is taken out however, they will almost certainly be excluded. In addition to these exclusions, chronic conditions such as dementia, Alzheimer's disease, schizophrenia and other forms of psychosis are not usually covered. This means that for those with the most serious debilitating psychological conditions, PMI does not address their needs.
In the event that a policyholder does claim, a typical PMI plan will provide a maximum of 28 days inpatient or day patient care a year and between £1,000 - £1,500 for outpatient treatment. These limitations raise the question of what happens if a client has not fully recovered at the end of a 28-day period and questions whether PMI proves effective in tackling psychological problems.
"We withdrew psychiatric care from our individual private medical insurance plans two years ago because it wasn't very clear to customers what they were covered for," says Charlie MacEwan, head of communications at WPA. "We also didn't feel comfortable offering the facility when there was the possibility that some of our policyholders could be left in the lurch at the end of 28 days."
While these fears are understandable, other providers claim that the treatment period is long enough. "We have consulted staff nurses at psychiatric clinics and the average stay for inpatients and day patients is around 14 to 21 days," says Julian Ross, marketing manager at Standard Life Healthcare.
It also appears that inpatient care constitutes a relatively small part of providers' spend on psychiatric treatment. "The vast majority of claims we receive are for no more than a few outpatient visits to a counsellor or a psychologist," says Fiona Harris, head of risk at BUPA.
The cost difference between PMI plans with psychiatric care and those without is surprisingly small in the corporate sector. "To include access to mental health services in a plan would increase the premium by about 1-3% for a corporate client," claims Brantingham. "Some insurers will also occasionally offer up to 90 days inpatient cover for an extra 1-2%, depending on a good no claims history."
Standard Life Healthcare goes even further, allowing corporate clients to take out up to 180 days inpatient cover with no limit on outpatient spending as part of its most comprehensive plan. Individuals do not receive such a good deal when they seek psychiatric provision, however. It is often only available in the most comprehensive plans along with a whole raft of extra benefits that make it hard to calculate the additional cost of psychological care. AXA PPP healthcare's standard PMI product, Ideal, does not offer psychiatric cover and limits additional services such as physiotherapy to £800 of treatment per year. For a non-smoking male office worker, 35 next birthday, the premium on Ideal would be £47.63 per month.
If the same client was to purchase AXA PPP healthcare's Premier plan, identical to Ideal, but with psychiatric care and no limit on additional therapies spending, the cost would be £58.77 per month. In this instance at least, it results in an extra 19% on an individual's premium for two extra benefits.
Early intervention
Research by the Health and Safety Executive has revealed that over half a million people are affected by workplace stress to the point where it makes them ill. A further five million report feeling extremely stressed at work, so it would seem that there is potential for advisers to write a large volume of new PMI business.
"Providers need to focus on the causes of stress and address these issues rather than attempting to deal with the end effect, such as depression," says Ross.
Urging early intervention is a positive message but with providers wording their policies so confusingly it is hard to see how any moves toward early action would ever work.
"Stress in itself is not covered in most policies as it is not an acute condition that has a specified treatment," explains Brantingham. "If however, that stress resulted in depression or severe anxiety then a PMI plan would cover the condition. It is not enough to simply claim that you need psychiatric care because you are stressed."
Contrary to this, BUPA provides cover for stress as a condition in itself. "We will offer psychiatric care to a client who is stressed if they have a referral from a GP," says Harris. The difference here is purely semantic as the two different wordings amount to essentially the same thing. It is not hard to imagine how clients can become confused about what they are covered for.
Sympathetic
Another grey area that can bewilder clients is providers' approach to self-inflicted injuries. A recovering alcoholic for example, may suffer severe depression as he or she goes through the early stages of rehabilitation. Drug abuse also poses the risk of a number of serious and permanent mental health problems, including psychosis. When a psychological disorder has been brought on by a client's own actions, insurers are surprisingly accommodating.
"If a recovering alcoholic is suffering from depression, his plan will cover treatment for his depression, but that's it. Any rehabilitation to actually beat the addiction won't be covered," says Ross.
At the other end of the spectrum, mental disorders can drive sufferers to physically harm themselves. Again, for the most part, insurers are sympathetic. "We're happy to cover the cause of a mental illness but not the effect. We'll tackle the depression that has led someone to self-harm or attempt suicide regardless of what they have done to themselves," says Harris. While their physical injuries are self-inflicted, their mental wounds are not and providers rightly deem such psychological illnesses eligible for treatment.
So is the psychiatric care available on PMI plans as comprehensive as it should be? It is not a long-term health management solution, but an effective option for fast and efficient treatment of illnesses that erupt with little warning and have the potential to be devastating.
Advisers can be satisfied with the level of psychiatric cover available on existing PMI plans since all but the most seriously ill can be treated effectively within the cost and time limits set by insurers. With regulation now upon us it is more important than ever that prospective clients are clear on what they will be covered for in the event of a mental illness. "The primary problem with psychiatric care is one of transparency; it isn't very clear to the customer what they are or are not covered for. We need to be black and white because in this day and age any grey area will be scrutinised and picked apart," says MacEwan.
For a client with a history of mental illness, arguably those with the greatest need for private mental healthcare, taking out a PMI plan will not help them manage their condition. Any pre-existing psychiatric conditions will be excluded from the policy but for the majority of clients, the psychiatric care available on PMI policies does precisely what it is meant to. It offers access to a counsellor, or in more serious circumstances, the option of closer observation at a clinic, the end result of which is hopefully a return to full mental health.
Of course there are circumstances in which people do fall through the net and find their insurance has not covered them as much as they had hoped. This is inevitable, but if the majority of clients are finding that their provision is suitably extensive to meet their needs, then providers are doing as much as they can.
COVER notes
• With the average wait for access to a counsellor on the NHS being around six months, more and more people are considering PMI.
• Individuals do not receive such a good deal when they seek psychiatric provision. It is often only available in the most comprehensive plans along with a whole raft of extra benefits that make it hard to calculate the additional cost of psychological care.
• Research by the Health and Safety Executive has revealed that over half a million people are affected by workplace stress to the point where it makes them ill.
