POSTED: October 11 2018
‘Health tax’ putting extra strain on NHS

‘Health tax’ putting extra strain on NHS

Patients driven away from private healthcare cost National Health Service ‘more than £1bn a decade’ 

Research from Bupa and economic experts Cebr has found that the thousands of private patients pushed back to the NHS due to Insurance Premium Tax (IPT) are putting added pressure on the service.

The findings estimate the cost of the 200,000 patients put off private healthcare due to the IPT since 2015 is £126m a year.

Bupa also warned that if this tax were to be set at the same level as VAT, a further 250,000 people could move from private health into public care, therefore doubling the cost of former private patients to the NHS – approximately nearly £300m a year.

Putting this tax even partly towards funding the extra £20bn that has been promised to the NHS is counter-productive, Alex Perry of Bupa pointed out.

“On behalf of consumers, we want to highlight to the Chancellor that raising this tax is unfair, and a case of robbing Peter to pay Paul, as it drives consumers away from health insurance straight onto the NHS at a time when the service would struggle to increase capacity,” said Perry, Bupa Insurance’s CEO.

“The danger is that when businesses or individuals stop or downgrade their health insurance policies, they are solely reliant on the NHS for their healthcare needs, including costly care and treatment for conditions such as cancer, heart and joint surgery which their health insurance policy would have covered.”

a ‘hidden’ tax

Insurance Premiums Tax – applied to motor, home, travel and pet insurance – has almost doubled since 2015, from 6.5% to 12%, putting additional cost directly onto the customer. However, according to Deltapoll (August 2018), 65% of consumers are unaware what the tax is.

With cost considered the main factor for the public when purchasing health insurance, IPF is yet another barrier for people looking to go private at a time when the NHS is already under immense strain.

“The findings within this report shed a great deal of light on the true cost of IPT, and allow little room for argument over the wider economic impact of the tax on health insurance,” said Stuart Scullion, executive chairman at ‎The Association of Medical Insurers & Intermediaries (AMII).

“This report shows us that the government is not considering the wider implications of generating revenue from IPT, particularly in relation to the costs to the NHS and health sector. We’re expressing our concerns about this with the aim of asking the industry, the government and the public to wake up to what’s going on and the consequences of it. There are many consumer purchasers of PMI, including many older citizens, who are going to be forced back into using NHS services if the cost of their PMI becomes unsustainable. How does that benefit the NHS? The government should be encouraging the purchase of PMI as a means of reducing the strain on an already overstretched NHS, not pushing thousands of people back onto it.”


This article was published by Cover magazine – you can read the original article here.