Medex Protect
Medex Protect’s is a new(ish) company run by directors Matthew Kelvie and Jason Dunks, who both have considerable experience in the PMI sector. The company is an appointed representative of Compass Underwriting and individual plans are underwritten by Gibraltar based Focus Insurance Company and company plans by both Focus and Lloyd’s syndicate Kiln Group.
Medex Protect is written as an annually renewable general insurance policy. It covers medical excess and shortfalls and is designed to sit alongside a private medical insurance (PMI) plan.
PMI insurers often offer big discounts for excesses, in effect shifting risk to the customer. Medex Protect can cover such excesses and, in addition, on the group version of the plan (only) if what the insurer is prepared to pay for treatment is less than the specialist or hospital is charging, that shortfall is also covered.
The plan is available to individuals or groups and offers three levels of cover. On the group plan, a single person gets three cover options:
150 Plan. This covers excesses up to £150 and shortfalls up to £250, within an annual cover limit of £400. The plan costs £45 a year.
250 Plan. This covers excesses up to £250 and shortfalls up to £250, within an annual cover limit of £500. The plan costs £57 a year.
500 Plan. This covers excesses up to £500 and shortfalls up to £500, within an annual cover limit of £1,000. The plan costs £114 a year.
Members must be UK resident and aged 18 to 80. There is no limit to the number of claims, just the total paid on claims and claims are settled directly with the customer’s provider of choice. Each member covered has their own annual maximum limit. Unlike PMI premiums, which tend to go up with age, premiums are not age-dependent.
For individuals (cover is available up to age 75), excesses are covered but not shortfalls (the anti-selection risk of covering those for individuals is probably too high). Again three options are available and they are:
Option 1. This covers excesses up to £250, with up to two claims a year and an annual cover limit of £250. The plan costs £40 a year, with the customer paying the first £100 of any claim.
Option 2. This covers excesses up to £500, with up to two claims a year and an annual cover limit of £500. The plan costs £80 a year, with the customer paying the first £100 of any claim.
Option 3. This covers excesses up to £1,000, with up to two claims a year and an annual cover limit of £1,000. The plan costs £150 a year, with the customer paying the first £100 of any claim.
Commission to brokers is 10% initial and renewal.
Comment: Choosing an excess has long been an accepted way to cut PMI premium costs. But there is a downside – paying the excess. A health cash plan funded by the saving can provide some benefits but the two types of cover are different and an HCP may pay out on some PMI claims but not on others.
Medex Protect offers an alternative, and it’s quite clever too. Individuals can cover their excess, although they still pay the first £100 of their claims. For groups, the deal is wider, as shortfalls are also covered and there is no co-payment.
From Medex Protect’s viewpoint, one clever feature is that the plan does not need separate underwriting. In effect, it only pays out if the underlying PMI plan pays out too. That avoids both underwriting and claims admin and makes life simpler for customers too.
PMI premiums are invariably age dependent but this plan isn’t so, over time, the savings compared to not having an excess could increase as time goes by. A spin-off benefit of lower costs is that the employee’s P11D bill would be lower too.
That said, the plan only really makes sense if it does generate savings long term, so Medex Protect will need to ensure future premium increases are manageable. The plan does have limits, so a regular claimant could find themselves worse off too albeit for most people, that should be a relatively small risk. The group plan provides usefully wider cover than the individual plan does, in that it covers shortfalls too, although that must be a difficult benefit to price accurately.
Plus points: Simple to buy and understand, with no underwriting or PEC exclusions; Potential to generate significant long-term cost savings.
Not so plus points: The cost of cover could increase in future or terms and conditions could be changed adversely; The plan is only worth having if it actually generates premium savings over the medium to long term; The idea is relatively unproven, although it has been live in pilot form since April.
Website: http://www.medexprotect.co.uk.
Rating (max 10): Innovation: 9. Overall: 9. Platinum
Tags: PMI; Medex Protect