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Sep 28, 2016

Mesothelioma Payment Scheme: Insurer’s Levy Reduced Again

 
 
 

The percentage of funding money that insurers will pay towards this year’s levy funding of the Diffuse Mesothelioma Payment Scheme (DMPS) has been again reduced, this time from 2.2 per cent to 1.7 per cent, the government has recently announced. The figure is now set at almost half of the 3 per cent originally pledged by the Government when DMPS was introduced in 2014.

Victims of asbestos exposure were already faced with uncertainty over their mesothelioma claims under DMPS as a second year of cuts to the insurance levy was first announced on 12th January 2016.

A key behaviour of asbestos-related disease is for the first asbestosis symptoms to only appear between 15 to 50 years following the original exposure to asbestos at one or more workplaces. DMPS was introduced in July 2014 as a “fund of last resort”, aimed at helping around 3,500 victims of asbestos-related mesothelioma cancer who every year are unable to trace their original employer or insurer, decades later.

Government commitment to sufficient funding

At the launch of DMPS, the government made a commitment to set a levy of at least 3 per cent on insurers to ensure sufficient funding. This was the amount that insurers said they could afford without passing costs on to customers. At the same time, the levy amount would a raise enough funding to guarantee 100 per cent mesothelioma compensation for all future scheme applicants and to victims of other asbestosis diseases.

However, in December 2014, the original 3 per cent levy was reduced by the government to 2.2 per cent for 2015, which was calculated to save insurers £11.6 million. The government claimed that the decision was the result of the low volume of applications to the payment scheme. It was discovered that the amount levied in 2014/15 was greater than the final cost of the scheme for that year.

The amount was higher because during the first six months, the scheme had only received slightly over 230 applications and made more than 130 payments of around £126,000 each. After 12 months the number of applications had reached 410, of which, just under two thirds of claims were successful.

Insurers had already made a significant saving

It has been previously pointed out that the insurers had already made a significant saving due to the reduced 80 per cent pay-out – increased from the initial 75 per cent of average awards. In addition, those diagnosed with mesothelioma before July 2012, plus victims of pleural plaques or other types of asbestosis disease, were also excluded from eligibility. Under pressure from MPs and asbestos victim support groups, the compensation amount was increased to 100 per cent in February 2015.

The full cost of running the scheme in 2015/16 was estimated to be £31 million. The government was then urged to maintain the levy at the 2014/15 level and use the surplus “to extend the compensation scheme to all victims of asbestos or for research into treatment”. However, £7.8 million was carried forward into 2015/16, which meant that insurers will only need to pay £23.2m to make up the difference. It now seems that insurers are simply being charged for the cost of the scheme only, which once again, can only deprive mesothelioma sufferers.

Research funding is essential if doctors are to be able to more effectively treat mesothelioma patients and improve survival rates. Despite of advances in scanning detection techniques and new ‘tumour targeted’ treatments, survival rates are still modest. Victims with advanced stage mesothelioma are expected to not live beyond 2 – 12 months.

Initial funding not enough to meet expected mesothelioma numbers

In January 2016, the House of Commons began its second reading of a further amendment to the Mesothelioma Act 2014, which proposed that the insurer’s levy must also provide an additional amount for research funding. However, the “research supplement”, would not exceed 1 per cent.

When DMPS was introduced, the British Lung Foundation (BLF) warned that the proposed initial funding (£350 million) would not be enough to meet the future demands for the expected numbers of confirmed mesothelioma cases. The Foundation also said that the actual funding amount needed should be at least £11 billion, and the only real answer to reducing suffering for mesothelioma patients was increased funding to find a final cure.

For the many families of a mesothelioma victim with only weeks to live, and who subsequently continue with a legal claim, time is always the issue. Claimants with asbestos-related diseases are still not being properly provided with the means to access full care and support in the short time they may only have left.

One month before DMPS was launched, HSE reported that the number of mesothelioma deaths had risen by nearly 11 per cent, from 2,291 in 2011 to 2,535 in 2012. HSE currently estimate that 5,000 people will die from asbestos exposure each year – the equivalent of 13 people for every day of the year – and a further 45,000 mesothelioma deaths can be expected by 2050.

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