The continuing consolidation of medical insurance organisations in the UK means that it is more important than ever to seek impartial advice before purchase, warns health, protection and wellness advisory group Punter Southall Health & Protection.

The impact of consolidations on businesses buying private medical insurance is that five providers now control more than 93 percent of the market, offering broadly similar propositions. Therefore buyers might be tempted to select on price alone.

John Dean, Managing Director at Punter Southall Health & Protection, said:

“There is a greater complexity to buying private medical insurance than merely comparing a table of benefits and making your decision based on cost. Although the market has contracted there are subtle but often significant differences between the approaches of the reduced number of providers, which should form part of the buying decision, to avoid potentially expensive mistakes. Directional care, limited access hospital plans, underwriting, and the interpretation of each provider’s terms and conditions are as significant to the buying decision as benefits, features and cost.

“We would encourage anyone buying private medical insurance, whether they are an individual or a corporate buyer, to seek independent and impartial advice from a market expert to avoid making potentially expensive mistakes.”

The warning comes following the approval of AXA PPP’s acquisition of Simplyhealth’s private medical insurance and self-insured health care trust business and The Permanent Health Company.

More than ten private medical insurance and health care trust providers have exited the market in the last decade, including household names such as Guardian Health, Standard Life Healthcare and Medisure.

Dean also said the recent announcement that Insurance Premium Tax (IPT) is to increase from six percent to 9.5 percent from November 2015 should  see mid to large corporate buyers consider a Health Care Trust as an effective alternative  healthcare funding mechanism to traditional PMI. He added:

“There is an increased complexity to set up a health care trust, but the advantages are obvious. This will become a viable option to many clients who had previously discounted the option.  The key to success of any arrangement is “seek expert advice”.