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Complaints about health and medical insurance can be some of the most sensitive and hardest-fought that we see – as well as some of the most challenging to resolve.
Like any type of insurance, when someone takes out a health and medical insurance policy, they will be hoping they won’t have to use it. If they do, however, they expect the policy to pay out – and it’s understandable that complaints arise when this doesn’t happen. At what is already a difficult time, an insurer’s decision to reject a claim can make things even more stressful for a consumer.
We have considerable experience of sorting out complaints about health and medical insurance. But we’re not medical experts – and it isn’t our role to diagnose the consumers who use our service. We consider carefully all the available medical evidence in each case – whether it is supplied by the consumer’s GP, specialists in the relevant field, or by an independent expert instructed by the insurer.
Though every claim – and its wider impact – is individual to the consumer who has brought the complaint, we see similar issues and themes in the cases referred to us.
For example, we are regularly called on to resolve disputes about whether a procedure is covered by a policy – or whether the consumer’s condition meets the policy’s definition. In these cases, we take into account the advice of the consumer’s treating doctor, as well as the evidence provided by the business.
We also see complaints from consumers who have discovered that a new policy – with a new insurer – doesn’t provide the same level of cover as their previous policy. In these cases, we look into how the policy was sold to the consumer – and whether and how any differences where highlighted.
We will always look to find a fair and reasonable solution in each individual situation. This may be telling the insurer to meet the claim. In some cases, however, we decide that it is reasonable for the insurer to have rejected a claim – or, where something has gone wrong, that they have already put things right.
The following case studies illustrate the range of complaints we receive.
After being diagnosed with breast cancer, Mrs B had a mastectomy in the autumn. Having discussed her options with her surgeon, she underwent breast reconstruction surgery a month later. The reconstruction was authorised and carried out under her private medical insurance.
In January the following year, Mrs B’s plastic surgeon wrote to the insurance company, saying he planned to carry out a follow-up reconstructive operation. However, this time the insurer rejected the claim. They said that Mrs B’s policy would pay out for “initial reconstructive surgery” only, and any subsequent surgery wasn’t covered.
On the advice of her surgeon, Mrs B decided to go ahead with the second operation – and then asked the insurer to reconsider their decision. The insurer refused. Feeling the complaints process might be intimidating, she asked her local branch of a cancer support charity to help her make a complaint. When the complaint was rejected, she asked us to look into it.
We asked the insurance company for a copy of Mrs B’s policy. This confirmed that, as long as it was agreed beforehand, the insurer would pay for “initial reconstructive surgery”. However, the insurer wouldn’t pay for “cosmetic surgery or treatment”, or any procedure relating to “previous cosmetic or reconstructive treatment.”
We also looked carefully at the correspondence there had been between Mrs B, her plastic surgeon and the insurer. In the letter turning down Mrs B’s claim, the insurer had said that their definition of “initial reconstructive surgery” covered “reconstruction of the affected breast.” But they had also said that if the procedures making up the initial surgery “subsequently require revision” then that revision wouldn’t be covered by the policy.
We noted, however, that in the letter Mrs B’s plastic surgeon sent to the insurer recommending her mastectomy and first reconstruction operation, he had said it was very likely that Mrs B would need further surgery “to complete the procedure”. When we asked the surgeon whether it was usual to need further surgery, he explained that it isn’t often possible to completely “correct the breast volume” in one operation.
The cancer charity supporting Mrs B referred us to guidance from the National Institute for Health and Care Excellence (NICE). This supported the surgeon’s view – confirming that most people need between two and four procedures to achieve a complete reconstruction.
In light of this evidence, we decided it wasn’t reasonable to treat Mrs B’s second reconstructive operation as separate. In our view, it was part of one reconstructive procedure, and so should be covered under her insurance policy. We told the insurer to meet Mrs B’s claim – and to pay her £350 for the upset and inconvenience they had caused.
Mr S’s employer had a group insurance policy for their staff – which had been provided by Insurer A for many years. Following a review of the staff benefits they offered, the employer decided to transfer to Insurer B instead.
A year later, Mr S contacted Insurer B to “pre-authorise” surgery to repair damaged cartilage in his left knee. The operation had previously been approved by Insurer A. At first, Insurer B told Mr S that they wouldn’t meet the claim because the procedure in question wasn’t approved by the National Institute for Health and Care Excellence (NICE), and wasn’t proven to be effective.
However, Insurer B then reversed their decision – acknowledging that the claim fell under the “transitional agreement” they had with Mr S’s employer for handling claims that had been made shortly before the group policy changed. Mr S went ahead with the operation on his left knee, and the cartilage was repaired successfully.
A few months later, Mr S phoned Insurer B to arrange for the cartilage in his right knee to be repaired in the same way. But this time Insurer B refused to authorise the procedure. They said Insurer A had authorised surgery only to Mr S’s left knee – so only the left knee fell under the “transitional agreement”. Insurer B pointed out that, as they had previously explained, they wouldn’t cover the operation under their own policy because it wasn’t approved by NICE.
Mr S made a complaint to Insurer B. He argued that, although NICE hadn’t approved the procedure, it was approved and widely carried out across the European Union. Insurer B responded to Mr S’s complaint – offering him £8,000 towards the cost of the surgery. This was how much the equivalent, NICE-approved procedure would have cost the insurer. However, the surgery Mr S was claiming for cost considerably more. Unhappy with this outcome, he asked us to step in.
We asked Insurer B for a copy of their policy wording. This explained that they wouldn’t cover:
“experimental, unproven or unregistered treatment that is not considered to be established UK medical practice or for which there is insufficient evidence of safety or effectiveness.”
We noted that the policy also excluded treatment that hadn’t been approved by NICE.
The policy also said that if someone decided to have treatment the insurer considered to be “experimental”, then the insurer would pay out only the amount they would have paid for “the nearest equivalent treatment”.
We didn’t think the policy wording was unusual or unreasonable. However, we needed to consider carefully whether it had led to a fair outcome in Mr S’s case.
We accepted that the procedure Mr S had claimed for wasn’t approved by NICE. However, we didn’t consider that this meant it was “experimental” or “unproven”. In our view, the fact Mr S’s left knee had been successfully repaired suggested the treatment was effective – so it was reasonable for him and his consultant to assume it would also be effective on his right knee.
We also looked at the wording of the transitional agreement. This said that if someone asked Insurer B to authorise a treatment that wasn’t established practice in the UK – but Insurer A had approved that particular treatment – then Insurer B would need to see:
“proof from your current insurer that this is a benefit covered by the current insurer as stated in the current insurer’s plan terms and conditions.”
It seemed to us that Insurer B had applied a very strict interpretation of the transitional agreement. By doing so, they only had to pay for the exact treatment that Insurer A had approved – to Mr S’s left knee. However, there was nothing to suggest Insurer A wouldn’t have met the second claim. In fact, given they had authorised the first operation, we considered it very likely that they would have authorised the second.
Mr S also provided a report written by his specialist before his first operation – which recommended that it wouldn’t be medically appropriate for both knees to be operated on at the same time. We noted that the transitional agreement failed to mention how long the arrangement would last. Given the two claims had been made in the same policy year, we decided the two operations should be viewed as part of the same course of treatment.
The transitional agreement between Mr S’s employer and the two insurers had been put in place to prevent staff from being disadvantaged by the change. But in our view, Mr S had been disadvantaged. We decided, in the particular circumstances of this case, that Insurer B had unfairly rejected Mr S’s second claim. We told them to pay the full cost of the procedure Mr S wanted.
Since Miss R fractured her back, she had been experiencing chronic back pain and limited mobility. She regularly saw a consultant to monitor and manage the pain.
Two years later, when Miss R was several months pregnant, her consultant told her that, because her baby was big, it was very likely that a natural birth would aggravate her injury and worsen the pain. The consultant recommended that Miss R have an elective caesarean section to reduce the risk of damaging her health.
Miss R had private medical insurance. After receiving the consultant’s advice, she sent the insurer a letter from her consultant explaining the situation – and asking the insurer to authorise a caesarean section. But the insurer refused. They told Miss R that, although they accepted that a caesarean was medically necessary in her case, the policy only covered situations where the woman’s life was at risk.
Miss R complained to the insurer. She said that, if this restriction existed, it wasn’t clear from the policy documents. She pointed out that the policy simply said that the insurer would consider the consultant’s report and make a decision.
In their response to the complaint, the insurer said that this particular benefit was “discretionary”. However, they said this discretion was used only when the woman’s life was at risk. And for this reason, they wouldn’t be changing their decision.
Miss R was worried and frustrated – and she referred the complaint to us.
In her complaint, Miss R had highlighted that she felt the policy wording was ambiguous. We asked the insurer for a copy of the policy document – so we could decide whether or not we agreed with Miss R.
We looked carefully at the policy booklet for mention of pregnancy-related claims – in particular, claims for caesareans. In the “exclusions” section, it was explained that although the insurer didn’t cover pregnancy-related claims:
“We may pay for eligible treatment for delivering a baby by caesarean section. However, we need full clinical details from your consultant before we can give our decision.”
Having read this, we could see what Miss R meant. In our view, the policy document didn’t reflect the cover available. It indicated that the insurer would base their decision on the clinical details provided by the consultant – but didn’t specify the requirement that a woman’s life had to be in danger for a caesarean section claim to be paid.
We pointed this out to the insurance company. They said the requirement formed part of their internal guidelines for exercising their discretion – rather than being a term or condition of the policy – and that was why it wasn’t set out in the policy document. The insurer explained that the requirement had been brought in after Miss R’s cover started. They told us they didn’t notify their customers this had happened because they hadn’t actually changed any terms and conditions – but only an internal guideline.
We disagreed with the insurer. In our view, they had introduced a strict term into Miss R’s policy while it was in place. We thought that the inflexibility of their guidelines meant they couldn’t actually apply discretion to each individual customer’s claim. The policy terms and conditions said the insurer would consider clinical information provided by the consultant when assessing the claim. And the insurer had already accepted that there was a valid medical reason why Miss R needed to have a caesarean section.
We decided that, in the circumstances, it wasn’t fair or reasonable for the insurer to reject Miss R’s claim on the grounds that her life wasn’t at risk. We told them to re-assess her claim – giving weight to her consultant’s opinion in line with the policy’s terms and conditions. The insurer told us that they would be reviewing their policy documents – to clarify the cover on offer.
Mr G took out a ten-year critical illness insurance policy in October 2003. This would pay him a lump sum if he was diagnosed with any of a list of serious illnesses specified by the policy. In August 2013, after experiencing chest pains, Mr G found that he needed coronary bypass surgery. He was put on a waiting list – and eventually had the surgery in November 2013.
Although his critical illness insurance had expired by the time he had the surgery, Mr G understood – from reading the policy booklet he’d been sent – that because the policy was still active when he was put on the waiting list, his claim would be met. However, when he made a claim, the insurance company rejected it. They said that if you were on a waiting list when your policy expired, then the claim would only be paid if you were waiting for an organ transplant.
Mr G complained. He said he felt that the wording in the policy document was unclear – and in the circumstances, the insurer should pay out. When the insurer wouldn’t reconsider, Mr G referred the matter to us.
We asked the insurance company for a copy of the policy documents that Mr G would have been given. Under the heading “General conditions”, the policy booklet said the policyholder would be covered if, before the policy expiry date, they:
“suffer from one of the conditions defined under "Conditions covered", provided they survive until the 14th day from the date of diagnosis, surgery or being added to a waiting list”.
First, we checked that the procedure Mr G had undergone met the policy’s definition of “coronary heart bypass surgery”. We were satisfied that it had. In fact, Mr G’s condition was more severe than the policy required – he had had three arteries corrected, whereas the policy only specified one.
Under the heading “Conditions covered”, the policy listed “Major organ transplant – including being added to a waiting list for a major organ transplant”.
The insurer told us that, from this wording, it should have been clear to Mr G that his claim wouldn’t be met. They acknowledged that Mr G had been put on the waiting list for his operation while his policy was in place. However, they argued that because Mr G didn’t undergo his surgery until the cover had ended – and it wasn’t organ transplant surgery – they had acted reasonably in rejecting his claim.
We disagreed. We felt the general condition contradicted the wording under “Conditions covered”. In our view, the policy wording was ambiguous – and we could see why Mr G had thought his claim would be met. We explained to the insurer that our approach is to interpret any ambiguity in a contract in favour of the party who didn’t write it – the consumer. This is in line with well-established legal principles.
We noted also that Mr G had been on put on a waiting list for the surgery six weeks before the policy expired. But in his local area, the waiting time for coronary bypass surgery was more than six weeks – and his policy had expired by the time he reached the top of the list. If the waiting time had been shorter, Mr G’s claim would have been paid. We didn’t think it was fair that he should be penalised because of the hospital waiting times in the area where he lived.
In the circumstances, we decided the insurer had unfairly rejected Mr G’s claim. We told them to offer him what he was entitled to under the policy – adding 8% interest from the date of the claim to the date of the settlement. The insurer volunteered to pay Mr G £300 for the upset they’d caused by rejecting his claim in the first place.
Mr K had a private medical insurance policy with Insurer C, which he took out through an insurance broker. During the application process, Mr K had told the broker that he had a heart condition and diabetes – and wanted the policy to cover both these pre-existing conditions. Three months into the policy, he made a successful claim for treatment relating to his diabetes.
However, because Mr K had made a claim, Insurer C quoted a significantly higher premium when his policy came up for renewal. So the broker who had arranged the original policy offered to search for alternatives. They went through a series of health-related questions with Mr K – and this time, based on his answers, recommended a lower-cost policy provided by Insurer D. Mr K went with the broker’s recommendation and his application was accepted by Insurer D.
A few months later, Mr K phoned Insurer D with a question about his cover. During the conversation, he was very surprised to be told that his policy didn’t cover his heart condition or his diabetes. Mr K contacted the broker straight away. He said he wouldn’t have taken out a policy that didn’t cover his pre-existing conditions – and felt that the replacement policy had been mis-sold.
The broker said they would look into Mr K’s complaint – and a week later, they got back in touch. They said they had discovered that during the application process, their representative should have asked Mr K, “Have you ever had any cancer, heart or psychiatric conditions?”However, they had actually asked him: “Have you had any cancer, heart or psychiatric conditions in the past 5 years?’’ Mr K had answered “no” – because his heart condition hadn’t been treated in the past five years.
The broker acknowledgedMr K had accurately answered the question he’d been asked. And they accepted that this had led to an unsuitable recommendation. The broker explained that a policy that covered Mr K’s pre-existing conditions would be more expensive. But they offered to put in place a suitable policy from that point forwards – and meet the extra expense for the first year.
Mr K didn’t agree to this – and asked the broker to refund all the money he’d paid towards the unsuitable policy with Insurer D. When they refused, he referred the matter to us.
complaint not upheld
Mr K told us his priority when looking for insurance was that his diabetes and heart condition would be covered. We saw that the prospect of not having the right cover had caused him a lot of stress. In our view, his not taking out cover – even though it would be more expensive – was never an option for him.
We explained to Mr K that our role is to put someone in the position they would be in if the business hadn’t made a mistake. The broker’s mistake hadn’t left him out-of-pocket. In our view, the broker had suggested a fair way putting things right – ensuring Mr K had the cover he wanted, and paying the difference in recognition of their error.
We noted that the broker had also offered Mr K £100 to compensate for the upset the situation had caused him. We told Mr K we thought this was reasonable.
Mrs L had a major stroke and was admitted to hospital. Sadly, she didn’t regain consciousness – and, following discussions with her family, her life support was withdrawn. She died two weeks after the stroke.
Mrs L had taken out critical illness insurance some years previously. Mrs L’s husband made a claim on his late wife’s behalf under the policy. The insurance company sent the claim form back to Mr L – saying it needed to be signed by Mrs L’s GP and the solicitor dealing with her estate. Mr L visited the GP and the solicitor to get the form signed, and sent the paperwork back again.
But the insurer then rejected the claim. They explained that critical illness insurance was different to life cover – which would have paid out when Mrs L died. They pointed Mr L to the policy’s terms and conditions – which said that the policyholder had to survive for 28 days or more after falling ill to be eligible for the benefit.
Mr L complained to the insurer. He said that the decision to withdraw Mrs L’s life support was the hardest he’d ever made. He explained that the family had agreed to go ahead quickly because they’d been told Mrs L’s organs could be used in an urgent transplant operation. However, the insurer wouldn’t reconsider – and Mr L asked us to step in.
We asked to see the policy terms and conditions – so we could consider the condition the insurance company had mentioned. The document confirmed that:
“The insured person must survive for at least 28 days after the date of diagnosis, otherwise benefit will not be paid.”
We thought the condition was worded clearly. But we needed to decide whether it had been applied fairly in Mrs L’s case. There was no evidence to suggest that Mrs L wouldn’t have lived longer – for 28 days – if her life support hadn’t been withdrawn. We thought her family had taken that decision because it was possible someone else’s life could be saved.
In this situation, we didn’t think it was reasonable for the insurer to enforce the 28-day condition.
We also noted that Mr L had been asked to submit the claim form twice – only for the claim to be turned down. In rejecting the claim only after Mr L had gone to the trouble of getting the additional signatures, we felt the insurer had made an upsetting situation all the more stressful.
We appreciated that Mrs L’s policy wasn’t life cover – and that in different circumstances the condition would apply. However, given what had happened in this particular case, we thought the insurer’s decision was unreasonable. We told the insurer to meet the claim – adding 8% interest from the date of Mrs L’s stroke to the date of the settlement. This would be payable to Mrs L’s estate.
Mr N was morbidly obese and also had type 2 diabetes. Over the years, his diabetes had become increasingly difficult to control. Mr N discussed his options with his GP, who said that, as Mr N was already taking the maximum dosage of tablets to control his blood sugars, he would have to start taking insulin. To avoid this, however, the GP recommended that Mr N try gastric bypass surgery.
Mr N decided to follow his GP’s advice. He had private medical insurance, and wrote to his insurer – with a supporting letter from the GP – asking them to authorise a gastric bypass operation. But the insurer refused. They said that Mr N’s policy excluded treatment for obesity. And it also excluded treatment for “chronic conditions” like diabetes – unless there had been an “acute flare up” of the condition.
In the insurer’s view, Mr N’s diabetes hadn’t “flared up” – but had been worsening for some time. So they weren’t willing to pay for any treatment relating to it.
Despite the insurer’s response, Mr N went ahead with the operation. Shortly afterwards, he asked the insurer to reconsider their position – and to refund his medical costs. The insurer wouldn’t agree to this, and Mr N made a complaint. When the insurer stood by their decision, we were asked to step in.
complaint not upheld
We asked to see the policy terms and conditions – so we could consider the exclusions the insurer was relying on to reject the claim. We noted that “treatment for obesity “was clearly listed in the “exclusions” section.
However, Mr N provided a letter from the consultant surgeon who had carried out his operation. This explained that, although weight loss can alleviate type 2 diabetes, weight loss wasn’t the main reason that gastric bypass surgery had been recommended to Mr N. According to the surgeon, gastric bypass surgery has a hormonal response that affects the body’s sensitivity to insulin. So the “primary reason” for the surgery was the effect on Mr N’s diabetes – and any effect on his weight was “a secondary gain”.
In light of this expert view, we thought it very likely that the surgery hadn’t been directly intended as a treatment for Mr N’s obesity – but rather for his diabetes. So the insurer hadn’t been right to rely on the policy’s obesity exclusion.
However, this didn’t necessarily mean that Mr N’s claim should be paid. For this to happen, we would need to be satisfied he had experienced an “acute flare up” of his diabetes. Looking at the policy, we found an “acute flare up” was defined as:
“a sudden and unexpected deterioration of a chronic condition that is likely to respond quickly to treatment.”
We noted that in his letter to the insurer supporting the claim, Mr N’s GP had explained that once tablets are no longer effective, and a patient is facing the need to start insulin treatment, the only alternative is gastric bypass surgery. The letter from the consultant surgeon also said that because taking insulin can cause further weight gain, the prospect of insulin treatment strengthens the case for having gastric bypass surgery.
Mr N told us that since his operation, he no longer needed to take tablets – and hadn’t had to start taking insulin. He thought that the fact his diabetes had “responded quickly to treatment” showed that it had been “acute” before he had the operation.
We acknowledged that Mr N’s condition had reached a very serious point – and that the surgery had improved his situation. However, type 2 diabetes is a progressive condition – and there was nothing to suggest that the way Mr N’s condition had progressed had been either “sudden” or “unexpected”. It appeared his condition had grown worse over time – and his GP had recommended the usual strategies for managing it.
We decided that – based on all the available evidence – Mr N’s chronic condition hadn’t gone through an “acute flare up”. So while the policy’s obesity exclusion didn’t apply in Mr N’s case, the exclusion relating to chronic conditions did – and the insurer had been reasonable to reject the claim on this basis. We didn’t uphold the complaint.
Mrs B was a self-employed IT consultant. However, she found herself becoming increasingly exhausted – and eventually felt she could no longer work. Shortly afterwards, she was diagnosed with chronic fatigue syndrome.
Mrs B made a claim on her income protection policy, which she had taken out when she started working for herself. The insurer agreed that her condition prevented her from working and began paying her a monthly benefit.
A year later, however, the insurer told Mrs B that they would be stopping the payments. They said they had made this decision because she had been observed carrying out various activities – including attending a home and garden exhibition. The insurer felt the footage they had taken conflicted with what Mrs B had told them about the level of activity she was capable of. In their view, she had exaggerated her incapacity – and she was in fact able to work.
Mrs B disagreed with the insurer and made a complaint – asking them to restart the payments. When they refused, she referred the matter to us.
First, we considered the policy's definition of “incapacity” – to check what Mrs B was covered for. This said:
“Incapacity means that because of sickness or accident, you are unable to carry out any of the duties of the occupation stated in the schedule.”
In the schedule, Mrs B’s occupation was listed as “IT consultant”. So we needed to decide whether the insurer’s evidence showed she was able to do this particular job.
We asked the insurer to provide us with the footage they had used as grounds to stop Mrs B’s payments. They told us they had carried out surveillance over a period of four days – and had found “considerable discrepancies” between what Mrs B said she could do and what she had been seen doing. However, the footage we were sent lasted only 20 minutes – and showed Mrs B walking around the home and garden exhibition. Other activities she had apparently been seen carrying out – including driving to the chemist and the supermarket – were listed in an accompanying report.
We got in touch with the specialist who had diagnosed Mrs B and was helping to manage her condition – to ask for his view on her ability to work. The specialist told us that he believed Mrs B remained “significantly incapacitated”. He felt in particular that the “brain fog” she experienced – which he said was a common symptom of chronic fatigue syndrome – meant it wouldn’t be possible for her to perform an intellectually demanding role like an IT consultant.
Having watched the insurer’s footage, the specialist told us he didn’t think it showed Mrs B doing anything intellectually demanding – or that contradicted the diagnosis he’d given. He also said he was aware that Mrs B had experienced significant “payback” – particularly bad fatigue – for days after attending the exhibition.
We reminded the insurer that if they wanted to stop paying a claim they had already accepted, they had to prove that the policyholder was no longer “incapacitated” in line with the policy. And we didn’t think the insurer had proved that Mrs B was capable of working as an IT consultant. In our view, the opinion of a chronic fatigue specialist carried significantly more weight than the short surveillance footage the insurer had provided.
In light of all the evidence, we decided the insurer had wrongly stopped Mrs B’s benefit – and we upheld her complaint. We told the insurer to restart Mrs B’s payments – backdated from the time they had been stopped and adding 8% interest. By this time, Mrs B hadn’t received any payments for a year. We also told the insurer to pay her £200 to compensate for the upset and inconvenience their actions had caused.
ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.
The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.