Cost of UK health insurance among fastest growing in Europe
The cost of health insurance is steadily rising across Europe as employees work and live longer and the number claims increase.
UK health insurance costs are anticipated to grow by 6.5 percent in 2016, the largest hike in five years.
According to Willis Towers Watson’s 2016 Global Medical Trends report, high claim volumes mean that health insurance costs are increasing year-on-year at one of the highest rates in Europe.
Within Europe, among very varied health systems, the UK experience surpasses that of France and Spain, which are expected to have modest increases of 3.5 percent and 1.2 percent respectively. Italy (0.8 percent), Portugal (2.1 percent), Greece (4.7 percent) and Belgium (5 percent) are also anticipated to experience lower health insurance inflation this year, as they have in each of the past three years.
According to the report, the UK did not suffer the largest price hikes in Europe. Nordic countries such as Norway (10 percent) and Sweden (8 percent) will experience higher cost increases, and Russia tops the European table for the second year running with 15 percent cost increases.
Globally, the average health insurance price increase for 2016 is estimated to be 9.1 percent, up from 8 percent last year and 7.5 percent in 2014, so European cost increases are relatively modest compared to other continents. In the Middle East and Africa, health insurance inflation rose from 10.3 percent in 2014 to 12.6 percent in 2015, and is expected to continue to rise.
Jeremy Hill, director in Willis Towers Watson’s Global Services and Solutions business, said: “Health insurance remains a key employee benefit in the UK, but the effect of aging workforces, costly and complex treatments, and technological advancements is that health insurance inflation in the UK is higher than in most of Europe. Employers continue to keep health costs under review, with many looking at cost-sharing mechanisms to contain cost, as well as looking at health and wellbeing approaches to improve the underlying health of employees.
“At the same time, UK providers are attempting to curtail these annual price increases. As both the provider market and insurers have consolidated, insurers are using their size to leverage more favourable pricing agreements with key hospital groups and service providers. In addition, some smaller insurers are forming independent healthcare purchasing alliances to procure competitively priced hospital treatment for their members.”
According to the report, the main causes of high price increases in UK health insurance are: an ageing workforce more likely to claim on their insurance; continuing delays in NHS treatment driving individuals to seek a private-sector solution; and the increasing availability and use of costly medical treatments.
Hill added: “The cost of health insurance continues to rise ahead of inflation almost everywhere in the world. While the last five years have seen relative stability in UK cost increases, the trend is starting to creep upwards and 2016 is predicted to surpass last year’s increase - for the third year in a row. In the last ten years, the cost of health insurance in the UK has almost doubled putting enormous pressure on budgets.”
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