Medical insurance companies are feeling the pinch. Not just because of the credit crunch but also because increasing numbers of policyholders are claiming help for cancer drugs that could prolong their lives.

The cost of cancer drugs has soared in recent years as medical advances have developed more and more sophisticated treatments. And costs are due to explode in coming years. There are forty or so new drugs ready to be licensed plus other developments - and they won’t be cheap.

And this has hit the pockets of the insurance companies – so much so that many now limit the cost of cancer care, including treatments designed to ease, not cure, symptoms. Only three medical insurers now offer full cancer cover – Pruhealth, Exeter Friendly Society and Bupa. How long they will hold this position, or their premiums, waits to be seen.

Traditionally, private health insurance has accepted claims to treat acute conditions – those are the illnesses that can be cured - but they don’t cover conditions that are managed medically because they medicine doesn’t have a cure for them. For example, diabetes and asthma. Those are called chronic conditions.

The problem is that in the medical world, not everything is so black and white. Take the rise in biological therapies for cancer such as Avastin and Herceptin. These drugs are designed to slow the spread of cancer, they don’t actually cure it. The question is whether this is acute or chronic treatment and that’s the grey area.

From the insurers’ perspective, they know that heart disease and cancer are the two illnesses people fear most and are the main reasons they buy medical insurance. So they don’t want to be seen to restrict cover. On the other hand the Financial Services Authority is keen to ensure that policyholders are fully aware precisely what is and what isn’t covered - grey areas are most unwelcome.

If you follow the logic it seems inevitable to us that the three insurers currently providing full cancer cover, will bow to the inevitable and join the others restricting cover by cost.

It’s a sign of the times.