VHI reports healthy profits after twice hiking premiums

State-owned health insurer VHI has reported a healthy profit after hiking its premiums twice in the last six months.

The company reported a net surplus of €56.4 million for 2016, compared with €45.5m the previous year and its improved reserves position of €558.2m is a 7% increase on 2015.

Total claims paid out last year totalled €1.34 billion, down slightly compared with €1.38 billion in 2015.

VHI increased their insurance rates by about 3% from last November and by about 2% from May. However, the company’s price hikes are lower than its competitors and are in line with medical inflation.

VHI said an increase in membership for the second consecutive year to 1.069m contributed to the improved financial results.

Chief executive John O’Dwyer said it was another successful year for the company. “These results were achieved despite the difficult dynamics of an ageing population, medical inflation and the persistence of low investment returns,” he said.

Last year VHI processed more than 984,000 claims for its customers. More than 766,000 were for in-patient and day-care claims, while a further 218,000 were for outpatient and primary care claims.

The greatest claims’ payout was for cancer and related care at €194.3m, followed by the heart and circulatory care for which €164.8m was paid.

Mr O’Dwyer said the VHI was “fully committed” to delivering affordable quality healthcare for their customers but warned of challenges ahead with those aged over 80 increasing dramatically to 470,000 by 2046.

Health insurance expert Dermot Goode said VHI’s financial performance had improved significantly in the past year and members would want to know why their premiums were increasing. Mr Goode of TotalHealthCover.ie said the cumulative rises for families had been between 6% and 10% in the past year.

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