Extending tax relief to private medical insurance taken out by the over- 60s was designed to help those who had been covered by their employer's private medical insurance to continue with their own cover.

However, even with the option to continue private cover offered by some employers' schemes, and with the extra tax relief introduced in 1990, the cost can be out of reach. And for those who were never in a private scheme before reaching retirement age, the number of companies willing to take them on is very limited.

Stanley Browne is managing director of Private Medicine Intermediaries, based in Knutsford, Cheshire. The company is Europe's largest independent private medical broker, formed after a management buyout from its previous parent, Cornhill Insurance.

Mr Browne cannot understand why some companies are prepared to consider such cover but others are not.

"It seems to be down to what the company's actuaries are prepared to look at," he said. "There does not seem to be any logical consistency to the decisions they make in this area."

He believes many of the policies are targeted wrongly, because they try to cover all possible costs.

"If you are even considering this sort of insurance in retirement, you clearly have a reasonable income," he says. "So you do not need cover for an hour or two of physiotherapy. You can afford to pay for that yourself. What you do need is to be covered for the major expenses involved in a hospital operation."

As well as some of the well known companies, such as Norwich Union, Mr Browne suggests that it is worth looking at the small Exeter Friendly Society. Their new plan, launched on April 1, accepts new applicants up to the age of 79. They are the only medical insurance provider who do not increase premiums for policyholders simply because they get older, they only increase because of medical inflation.

This is achieved despite a low starting price. The cost of cover for an applicant who is 60 at entry is just under £480 after tax relief, compared to more than £700 from a typical major insurer.

The society is not at present well-known, and the majority of members join on the personal recommendation of others. However, it is about to start an advertising campaign in the press, which may bring it to wider attention.

It succeeds in keeping prices down mainly by a close attention to detail. It negotiates annu- ally with hospitals to agree accommodation rates. Generally its members are limited to the lowest accomodation bands, and may sometimes have to share a room, but the society has managed to agree accommodation at these rates in most private hospitals.

They also check the bills carefully when they arrive, and take a firm view of the cost of a consultant's time if a procedure is routine they do not expect to pay an inflated bill simply because the surgeon considers himself worth it.

Despite this, the society prides itself on good claims handling, settling bills within days.

It seems that this tight approach to costs is the only way that insurers will be able to offer the elderly access to private medical insurance. Without it, it is probable that just as private medicine becomes worth having, it will become too expensive to afford.