If stakeholder pensions are helping the public pay for what was once paid for by the state, how long will it be until the government introduces stakeholder healthcare and asks the public to consider their healthcare costs in the same self-sufficient manner?

During the recent general election, political parties banged the Europe drum, yet a national survey revealed that health and education came far higher on the public agenda.

With the election over, the NHS is at the centre of debate after a survey of 2,000 people by the British Medical Association (BMA) revealed 23% thought National Lottery money was the best way to improve health services.

However, BMA treasurer Dr James Appleyard stressed health could not rely on the lottery's popularity.

Almost a third of those questioned were in favour of voluntary taxation through lottery sales for the benefit of the NHS. An even stronger commitment was shown by a further 20% who favoured an increase in taxes to give healthcare a new lease of life. The results of the survey only served to underline the public perception that healthcare is under-funded and in crisis.

In their manifestos, both Labour and the Conservatives acknowledged the need for "radical reform", but also promised not to increase the basic and top rates of income tax and not to extend VAT. So where do we stand, now that we have a government that is committed to improving healthcare but seems to have no extra funds to do so?

I believe the time has come for individuals to start making provisions for their own healthcare in the same way that many people take responsibility for their own retirement. There is an ageing population, which has already started to put a financial burden on the NHS. Treatments that are currently available free, such as dental surgery and physiotherapy, may well have to be paid for by individuals as the state looks for ways to reduce its own financial input into the service.

Stakeholder healthcare to pay for day-to-day healthcare is becoming the next fashionable employee benefit. Many companies already offer private medical insurance (PMI), but it is relatively expensive and doesn't cover the everyday, yet essential, healthcare treatments like a filling at the dentist or a new pair of glasses. The cost of these treatments to the public has been rising steadily over the past 20 years and will continue to do so.

Perks of the job
Potential employees usually look at salary, bonus, company car, life insurance and pension benefits before deciding whether to accept a job. Many of these benefits can be expensive and exclude large numbers of the workforce. However, be-cause healthcare cash plans can be provided inexpensively, they can be offered to all employees. In addition, they can be adapted to suit all members of the workforce, providing both relevant and repeatable benefits. Healthcare cash plans also help to retain staff in times of recruitment difficulties. Proof these plans are gaining popularity among employers is that many of the country's largest and most forward-thinking companies are now taking stakeholder healthcare into consideration and providing healthcare cash plans for staff.

If, as most companies believe, the most cost-effective and simple way for people to make provision for their healthcare needs is via healthcare cash plans, how should they choose from a growing market of providers?

Maximum benefits
Sustainability is a key issue. Any established provider should be able to provide maximum benefits for policyholders, even if annual premiums appear to be lower than the potential benefits. The nation's health requirements are continually evolving and providers need to have the size, resources and experience available to provide relevant products and acceptable service levels to policyholders.

Smaller providers are likely to find it difficult to adapt to the developing claims culture in the UK, as claim rates are set to continue rising. It takes professional financial fund management skills to ensure the fund provides maximum benefits, financial stability and low premium rates.

One of the final points about the provider market is that many of the more established companies have a not-for-profit status which guarantees there are no shareholders to satisfy with dividends or demands about capital growth - all the benefits go to policyholders.

Stakeholder healthcare provision, like stakeholder pensions, will act as a means of alleviating financial pressure on the government and soon "looking after number one" is something we eventually may not have much choice about. The worrying part is that many people have not fully understood the concept of stakeholder pensions and hang on to the belief that the state will provide. Hopefully, they will see the more immediate benefit of looking after their healthcare with a healthcare cash plan and this will prompt quicker action.

  • Richard Sear is the chief executive at HealthSure.

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