In a message to the Treasury the Association of Medical Insurers and Intermediaries (AMII) will today launch a campaign for the Government to rethink recent tax rises on health insurances.
‘Hands off health insurance premiums!’ is the massage announced at AMII’s AGM today.
AMII, a Trade Association promoting best practice within the protection industry, believes that HM Treasury has viewed Insurance Premium Tax (IPT) as “low hanging fruit” for generating revenue with three increases in the last two years. There was no change in the recent Budget to the planned increase to 12% due to be implemented from 1 June, impacting on the NHS and Health & Wellbeing Sector.
IPT is a relatively new tax and has increased considerably of the years. Introduced in 1994 at a rate of 2.5% the rate has risen steadily over the years to 4%, then 6% and in the last year two rises, 10% and from 1 June 12%.
It is feared that the additional cost burden will have a detrimental effect to people and employers at a time when health insurance premiums are already under pressure. If private medical insurance contracts are cancelled then these people would likely turn to the NHS.
AMII Chairman, Stuart Scullion says: “Increases in IPT affect the NHS as much as the Private Health sector. With the taxman taking an additional £120 in IPT for every £1,000 premium charged it is no wonder some buyers of health insurance and health cash plans are saying “enough is enough”, cancelling their PMI and relying on an already overstretched NHS.
For employers and employees IPT represents a triple taxation. Retirees and mature consumers are cancelling their healthcare cover and relying on the NHS as IPT adds further pressure on affordability.
The Chancellor has a responsibility to liaise with the Depatment of Health to ascertain the total impact of increases in IPT in terms of revenue raised versus cost to the NHS. I suspect the results would make interesting reading”
Stuart goes on to say that at the AMII AGM “we will announce our action plan to raise public awareness about the impact of IPT increases on healthcare with the launch of an IPT Parliamentary Petition.
AMII has a responsibility to lobby Government in the interests of health providers, intermediaries, employers, consumers and the NHS.”
The AMII AGM is at Whittlebury Hall, in Northamptonshire, offering the opportunity to hear from industry experts on key issues impacting the healthcare insurance sector.