Public policy in the UK remains that the bulk of medical care should be provided free at the point of delivery by a National Health Service. But growing pressures on the NHS, and greater concern for convenience and comfort in medical care, have led to a significant demand for private health provision. The OFT decided in May 1995 to launch an inquiry into health insurance, as part of the Director General's remit to 'keep under review' trading practices which 'may adversely affect the economic interests of consumers'. The OFT examined four key health insurance products which, in terms of their suppliers, customers and content, constitute distinct markets. Policies can either be stand-alone or linked to life assurance, enabling payments from the latter to be 'accelerated' when illness occurs.
Policies normally provide assistance in the form of a fixed lump or annual sum.
LTCI represents a relatively new market, with only around 20,000 policies sold to date, but this may increase sharply if proposals contained in the Government's recent consultation paper, A New Partnership for Care in Old Age, come into effect. The OFT report focuses on those policies which require the individual consumer to decide the nature and size of the cover provided. Group cover policies are not examined in depth. The study found that, while each market had its own distinctive features, a number of issues were common to the majority of medical insurance products. Policies are complex .