Customers of private medical insurance are facing long delays before they can get their money back for treatment, because of the small print on many policies, according to PruHealth.
Many insurers have policies with clauses that allows them to avoid making payments for up to two years. Some face longer delays if they are looking to claim for certain conditons.
The reason is that many health insurance policies are sold on the basis that do not require customers to have a medical or to declare their medical history. The result is that insurers put a two year bar on claims for the treatment of on ongoing condition that existed in the five years before the insurance was taken out. This effective stops people from discovering a conditions then signing up for insurance cover.
PruHealth thinks this is a “sneaky” practice that is unjustifiable. It could lead to customers being short changed.
Shaun Matisonn, chief executive of PruHealth said “The principle is a reasonable one. It discourages people from taking out insurance in the certain knowledge that they need to make an immediate and sizeable claim.
“But what most people don’t realise is that if they do need to see a doctor about a pre-existing problem during this two-year period the insurer will start the two-year exclusion all over again.”
In practice, this means a person who suffers with a knee injury four years before taking out medical insurance and it flares up 22 months after getting it. The insurer will not pay for the treatment then, but they will also bar any future payments for the injury for the next two years.
“We think this practice is inequitable and unjustified,” said Mr Matisonn.
“It’s a sneaky way of reducing the insurer’s risk and penalises people unfairly at a time of acute need.”
He added: “Imagine you were just a few weeks or even a few days away from reaching the two year deadline when an old condition flares up. You check to see if you’re covered only to discover that not only is the answer no, but you’ve now got a further two years to wait before you can claim for any treatment for that condition.
“We’re calling on the industry to follow our lead, abandon this practice and switch to a more equitable fixed two-year exclusion.”
Mr Matisonn adds that the changes should not stop there.
“We think there are many other aspects of private medical insurance which need to be reformed and reviewed. First and foremost we need to treat the customer fairly. If insurers offered more value for people who make efforts to look after their health they would have to rely less on other techniques to reduce their costs.”