Shoppers at Sainsbury's will this weekend find a new product on sale at the tills as the supermarket becomes the first to start selling "affordable" private medical insurance to the millions of people it says are "priced out" by soaring premiums.
But when Jobs & Money carried out a price test, we found that Sainsbury's was far from cheapest, with similar or better private medical cover available elsewhere at up to a third less.
We checked out the prices at all the major providers, asking for a quote for a single male aged 41 living in London with no pre-existing medical conditions. We found that premiums ranged from just £22 per month (HealthNow) to more than £100. Sainsbury's quote came in the middle range at £44.
Unfortunately health insurance plans are devilishly difficult to compare in price. There is perhaps no other field of insurance where the "whistles and bells" make such a difference to the price quoted.
Quotes vary according to age, gender, location and the level of "excess" chosen on the policy, with age the most important factor. Adverts usually give an example of a person in their 20s, where the premiums look seductive, and often below £30 per month. But as you enter your 40s and 50s, the premiums escalate sharply. And if you have pre-existing conditions and need to be specially underwritten, the premiums go through the roof.
The second problem for buyers of private medical insurance is wading through the range of plans and options. Budget plans almost never cover you for out-patient care, and may restrict your access to in-patient care as well. As hospitals in the capital are more expensive, Londoners will also find that the budget plans are unlikely to cover them for local treatment.
Sainsbury's Health Cover plan fits into the budget category. It won't pay for private GP consultations. It won't pay out for conditions that already exist, and excludes any treatment for cancer, birth and pregancy. And like nearly every PMI plan, it does not cover accident and emergency treatment.
What Sainsbury's is really offering is a policy to jump NHS waiting lists, covering only those treatments where other people generally have to wait. Mark Sims of Sainsbury's says: "We've taken a commonsense look at health care and, unlike other products, we don't ask you to pay for what you don't need. We offer private cover for a list of over 900 treatments, stripping out those already available just as well on the NHS."
The Sainsbury plan shares a remarkable similarity to the cheapest one in the market from HealthNow - they are both underwritten by the AIG insurance company - except that the Sainsbury policy is twice the price. So is this a supermarket fiddle?
Mr Sims says: "The policies have similarities, but we cover pretty much every elective surgery while HealthNow covers less than 130. We also offer up to £150 worth of physiotherapy."
Yet if consumers do a little more shopping around, they can find budget policies which comprehensively cover in-patient hospital costs and still at a price below the supermarket.
For example, Legal & General's gave Jobs & Money a quote of £29.80 a month for a Lifetime Essentials plan that included full in-patient and daycare cover. Increasing cover to include out-patient treatments, such as physiotherapy and osteopathy, wouldsee the price rise to £56 a month (for £1,000 worth of treatments) or £75 a month for unlimited cover.
PPP's starter plan began at £46.84 - just £2 more than Sainsbury's, yet covering all in-patient treatment rather than a prescribed list. Cigna was also highly attractive, offering a premium of £45.71 for a plan that included not just full in-patient cover but also a range of out-patient treatments such as physiotherapy, chemotherapy, osteopathy and chiropractice.
We showed the details of the Sainsbury policy to Phil Taylor, managing director of specialist broker Preferred Medical, who is also treasurer of the Association of Medical Insurance Intermediaries.
He says: "The Sainsbury press release refers to 900 conditions including pre-admission tests. But in reality this is a very small number - other insurance policies will cover you for tens of thousands of treatments. I would be very reluctant to sell a policy that is so vague about what it will cover. On first view it would not be high on my list."
Seaching for a policy and comparing degrees of cover is a laborious process; this is one area where specialist advice, particularly if you have any pre-existing conditions, is extremely useful. The Association of Medical Insurance Intermediaries can be contacted at 0870 112 0431 or at amii.org.uk
