Levy set to hike up cost of health insurance

The cost of health insurance is to rise again after the health minister announced changes to the rate of stamp duty.

The changes, which affect up to 85% of policies and will come in on Mar 1 next, have been criticised and labelled “a disaster” by health insurance expert Dermot Goode, who claimed it would accelerate the “vicious cycle” of people dropping health insurance altogether.

Health Minister James Reilly admitted he was “reluctant” to raise the stamp duty on the advanced cover plans, but said it was necessary to protect community-rated health insurance for older and less healthy consumers.

Those on “advanced” policies will see the stamp duty on the policies increase from €350 to €399 per adult and from €120 to €135 per child.

Health insurance companies indicated the tax increases will be passed on to the consumer, resulting in more expensive cover.

Mr Goode, of Health Insurance Savings, said that the latest measure — added to the “huge” impact of the cutting of tax relief on health insurance announced in the October budget — would simply lead to more people dropping their cover, unless they were able to “suck it up”.

He estimated that between 80% and 85% of policy holders would be affected and said: “Every time there has been an increase in the levy it has been passed on to the consumer.”