Bupa accused of ‘misleading behaviour’ for increasing healthcare premiums

Bupa client Andy Marden told FT Adviser that the premiums for his wife's private healthcare coverage increased after switching from a corporate policy back to a personal policy.

Marden explained that he took out private healthcare with Bupa in 2007 and merged it with his wife’s policy, which was taken out in 1997, to create a policy for his family. 

Unfortunately, Marden’s wife was diagnosed with ovarian cancer in 2012 and received treatment via Bupa including chemo, surgery, and ongoing maintenance medication.

“Her consultant has been quite clear about this, if she had only had the NHS to rely on, in terms of treatments available, her prognosis would have been much worse”, Marden stated.

In 2015, Marden joined a new employer which offered a private subsidised healthcare policy via Bupa at a reduced cost to him,when compared to the personal scheme he was on at the time.

Marden enquired with Bupa about what would happen when he left the employer’s corporate scheme to go back onto a personal scheme, such as in the event of retirement.

He stated Bupa assured him that, as long as premiums were paid continuously into a Bupa scheme (whether corporate or personal), it would be regarded as “continuous cover” and moving back would be no issue.

Therefore, Marden moved his wife's coverage over to the corporate scheme in 2016/2017.

Marden's wife suffered a recurrence of the cancer in 2018 and this involved more chemo, a different maintenance drugs regime and further tests.

Retirement planning

In April, Marden started a six-month sabbatical from work and started thinking about his retirement, which he expects to take in a couple of years' time.

Therefore he started looking at planning income and expenses during retirement.

As a result, he got in contact with Bupa to ask what his premiums would be when he retired and had left his corporate scheme but was informed Bupa did not give out that information unless there was a committed leave date within six months.

After Marden complained this made retirement planning very difficult, he said Bupa relented and agreed to provide a quote.

But Bupa said it gave Marden an estimated price at the time.

Bupa said to move back to a personal scheme, premiums would be £1,200 a month with an automatic no-claims discount of 65 per cent for anyone, regardless of circumstances.

To me, this smacks of the early stages of a downward spiral into a horrendous US-style healthcare situation.Marden

This represented a significant increase on the £350 in premiums Marden had for his personal policy in 2007 before joining the corporate scheme.

“They seem to be treating the exit from the corporate to the personal scheme almost as a fresh case, having no bearing whatsoever that I was on a personal scheme before” he explained.

However, Bupa stated it had quoted Marden £6,752.04 and his wife £9,588.36 and that the £44,000 comes from Marden's own estimate of what might happen over 4-5 years assuming they will both make high-cost claims.

Misbehaviour

Marden stated that, to him, Bupa seemed to be acting in a “misleading and unethical manner” for several reasons other than simply the “massive” increase to his premiums, such as the initial “assurance” that moving between policies would be considered continuous cover.

“My wife’s condition was well established by then and no-one thought to warn me about the massive premium increase when leaving the corporate scheme in the future,” he explained.

“In any case, saying that they will continue cover but not mentioning that kind of premium increase makes a mockery of the term continuous cover.

“It sounds like 'if you want the private healthcare to keep your wife alive you have to keep working until she’s dead'.”

FT Adviser understands Bupa had offered continuous cover but Marsden was comparing two different policies across a 17 year time period, during which time medical inflation and the age of the customers would have resulted in a different price.

Additionally, Marden accused Bupa of trying to prevent people from discovering that such costs exist by only providing an estimate in principle once an exit is confirmed.

“The fact that they are also at pains to not give people a quote until they’re committed to leave, that's smacks to me of people trying to obfuscate things,” he claimed. 

Marden has taken action to address this including getting in touch with Bupa, with his complaint eventually reaching the directors.

He reported receiving a final reply saying this was all according to “standard practice” and that there was nothing that the firm are prepared to do.

Marden also provided insight into how this had affected him, stating that he has had to take additional time off work due to the “anxiety and the stress”.

Response

Responding to these claims, Bupa UK general manager for consumer insurance, Richard Washington, stated that, when leaving an employer, Bupa allows customers to keep their insurance going through moving to a new personal policy.

This allows them to continue with any treatments and keep cover for any ongoing conditions. 

“We offer customers a range of cover options and prices so they can choose the most appropriate policy for their needs and budget,” he explained.

“If a customer chooses to move to a personal policy, their cover premiums will no longer be subsidised by their employer and the price they pay will increase.

How many other employees across the industry are sitting on a ticking time bomb, unaware of what may impact them one day?Marden

“As in common with all health insurers, we consider several factors when calculating personal policy premiums including any previous claims, their age and the type of policy they choose.”

In the case of Mr and Mrs Marden, Washington reported they had asked for a quote for Bupa's most comprehensive policy, which "cannot be compared" to their entry level policy from 2007.

Washington additionally stated that, since then, medical inflation has increased "significantly" and that Insurance Premium Tax has also increased.

"We have supported Mrs Marden with high-cost treatment, which we are pleased to have been able to do," he added.

Wider concerns

Marden additionally shared his concerns about the wider implications of this and how other people may be affected in a similar way.

He stated that, throughout the ordeal, Bupa has continued to state to him and his employer that this represented standard industry practice.

“To me, this smacks of the early stages of a downward spiral into a horrendous US-style healthcare situation.”

Marden added: “How many other employees across the industry are sitting on a ticking time bomb, unaware of what may impact them one day?”

However, Washington stated: “The Financial Ombudsman Service has already reviewed Mr Marden’s complaints and found we treated him fairly when providing a quote and explaining how much the new personal policy would cost.

“We offer a range of cover options, policies and prices and we’re happy to discuss these with Mr Marden.

“We’re very sorry that Mrs Marden is still unwell and we’re continuing to provide her with the treatment, help and support she needs.”

tom.dunstan@ft.com

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