Does the state wish to encourage or discourage private medicine? Would reducing IPT for PMI help waiting lists?

Does the Insurance Premium Tax (IPT) paid on Private Medical Insurance (PMI) distort the market now that the average person is suffering from the recession? The leaders of the insurance companies think there should be a special case for PMI as the level charged is now affecting Health Services waiting lists adversely. Would reducing IPT for PMI help to reduce appalling and increasing waiting lists? A friend was told his knee operation might be in 2 years, and another that his prostatectomy for rising PSA would be in 18 months… 

Nicholas Hellen reports in the Sunday Times 7th October 2018: Tax hikes drive private patients back to the NHS

Tax rises on private medical insurance have pushed 200,000 patients back to the NHS since 2015 at a cost to the taxpayer of £126m a year, according to a report commissioned by Bupa.

The cost of policies has soared in the past two years after successive rises in insurance premium tax (IPT) — from 6% to 9.5% in 2015, to 10% in 2016 and 12% in 2017. Both the Conservatives and Labour have indicated they could raise the rate to 20%.

Bupa claims that if the tax were raised to this level, a further 250,000 patients could move from private health to public care, hiking the cost to the NHS of caring for formerly private patients to nearly £300m a year.

Alex Perry, chief executive of Bupa Insurance, said: “Raising this tax is unfair and is a case of robbing Peter to pay Paul, as it drives consumers away from health insurance straight onto the NHS — at a time when the service would struggle to increase capacity.

“When businesses or individuals stop or downgrade their health insurance policies, they are solely reliant on the NHS, including costly care and treatment for conditions such as cancer, heart and joint surgery, which their health insurance policy would have covered.”

The report, by the Centre for Business and Research, estimates that each percentage point increase in IPT drives 31,500 private patients to cancel their cover. It generates £37m in extra tax revenue but adds £21.5m to NHS costs.

The health insurance market peaked in 1997, when 1.5m lives were covered. It has been shrinking since then, dropping to about 1m in 2015. Figures in the report are for individual policies only; the corporate market is almost 10 times as large.