Thanks for that - gave me a starting point to do a bit more reading, and it seems I probably am being over sensitive!
As far as I can find out, it is considered reasonable for the employer HR to be able to see the medical information on the insurance application form, but they must have procedures in place to keep the information confidential and not to use it for any purpose other than what it was provided for.
I agree that Health insurance is a good benefit - however, unlike my last employer who had a "Medical History Disregarded" scheme (in other words, no medical questionnaire, and pre-existing conditions covered, a scheme that apparently costs the employer around 30% more than basic cover), my new employer has a "Full Medical Underwriting" scheme, where they want to know about every visit you have ever made to the doctor, and then apply exclusions. At my age, there is a lot to go on the form!!!