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Getting the nation's health off the critical list

If the health of the UK was diagnosed, then it could well be placed on the critical list.  The number of working days lost due to illness or injury is staggering, with nearly 39 million working days lost in 2020/1. The pressure on the NHS remains unrelenting. The desire to reduce both must remain a priority, because when it comes to the nation’s health, there should be no second best.  

But while there is no silver bullet to improving the nation’s health and its healthcare, there is one step that the government could take immediately to support a heathier workforce and a healthier economy, as well as giving much needed relief for the NHS.  And that is to reduce the rate of Insurance Premium Tax (IPT) on health insurance. It could kick start a healthier UK. 

We have long argued against the unfairness of IPT, which doubled from 6% to its current rate of 12% between 2015 and 2017, as the ultimate stealth tax which penalises prudent individuals and businesses for doing the right thing and taking out protection such as health insurance. As millions of households continue to battle the rising cost of living, the need for financial resilience has never been greater, and the impact on household finances of being off work through illness or injury has never been felt more acutely. With financial protection against life’s setbacks more important than ever, barriers like IPT that discourage the take up of health insurance can only be detrimental to the nation’s health. 

An increasingly valuable workplace benefit 

Recent ABI-commissioned research from Public First found that 7 in 10 people would use health insurance if it was offered as an employee benefit. Increasingly, the provision of group healthcare cover is seen as a desirable employee benefit. For employers it can help attract and retain the best talent, support employees and their families, and improve business productivity by supporting employees to recover and return to the workplace. So, a step that encourages its availability in more workplaces is a win-win for employers and their employees alike. 

Not just about paying medical bills 

Health insurance is not just about speedy medical diagnosis and treatment. Individual and workplace policies can offer a wide range of support services, including access to mental health support services, rehabilitation to help recovery, and guidance on healthier lifestyle options.  

Cooperation not competition  

Let’s address any perception that health insurance is in competition with the NHS. It is not. The independent health sector has a track record of working alongside the NHS.  During the Covid pandemic for example, independent hospitals opened their doors to provide extra capacity to help relieve pressure on the NHS. The NHS will always be the go-to for acute and emergency medical care.  

But the independent sector has a key role to play in relieving pressure on NHS waiting lists. We do not need to be coy about this – in recent ABI consumer research, 7 in 10 people agreed that a person paying for treatment is one less person the NHS has to worry about, with over two thirds (64%) agreeing that those who can afford it should be encouraged to have health insurance to reduce pressure on the NHS.  

Insurers have a significant role in preventing ill-health, supporting a healthy workforce and reducing pressure on the NHS. The case for encouraging greater take up of health insurance by the simple step of reducing the rate of IPT has never been more persuasive and timely.  


Last updated 13/03/2023