The insurance co linked to the travel agent (week's hol in Menorca) was going to charge us £70 on top of the £40 for the two of us because of his conditions. Doesnt this seem OTT and do you know of good travel insurance for someone in these circumstances, thanks.

No, it will always be expensive for someone with health problems. 70$ is a good deal, especially for someone who is a risk for them.