Simple ways to save on health insurance
looks at how families could save more than €1,000 a year by switching health insurance.
IF YOU have been on the same health insurance plan for the past three years, you could save an average of €500 per year if you switch.
So says health insurance guru Dermot Goode, founder of TotalHealthCover.ie.
He says that while individuals may be paying between €400 and €500 over the odds for cover, families could be looking at overpayments in excess of €1,000.
He adds: “Too many people auto-renew their cover, which means they have no chance of securing better deals at a lower cost. The fact is, this behaviour could be costing them hundreds if not thousands on their cover.”
“Of those who do shop around, many leave it too late and only seek advice after their renewal date has passed and are then shocked to find they’re locked into the same ‘dated’ contract for another twelve months. For policyholders on the same plan for three years or more and/or those who are afraid to switch insurer, the average savings are in the region of €500 per adult or more depending on the plan.”
The problem, of course, is that health insurance, like pensions, scores very highly on the boredom scale.
Nobody wants to take the time to inform themselves, no matter how compelling the savings.
Do yourself a favour and give the subject an hour this weekend. It could end up being the most profitable hour you’ll spend all year.
The big impediment to switching provider is the same one that keeps us with the same bank and, to a lesser extent, the same electricity, gas and telephone supplier.
Fear. Dermot Goode says that this remains one of the biggest stumbling blocks for consumers and is more prevalent amongst older members.
“People don’t realise that they get full credit for previous membership which means no re-serving of waiting periods or age loadings to worry about,” he said. “If they switch from renewal, there will be no break in cover whatsoever. If they switch to an equivalent plan, they will be on cover immediately for any existing medical conditions.”
TotalHealthCover.ie says that it advises those on dated plans such as VHI Health Plus Choice (€2,721), Irish life Health Optimise Silver (€3,828) or Laya Health Manager (€4,579), that being open to switching provider could generate savings of €400 to over €2,500 per adult depending on the plan selected.
When you are talking with health insurance providers, it is always a good idea to ask them if there is a cheaper corporate plan with similar benefits that you could opt for. While these plans are not marketed to members of the public, insurance companies must offer them to you if asked.
“Many consumers still say they’re not entitled to join these ‘corporate’ plans,” says Goode. “These schemes are open to every consumer irrespective of the plan name or target market. They tend to offer the best overall benefits — including guaranteed refunds on your out-patient expenses with no excess to pay first.
“Many consumers are still shocked to realise that they can increase their benefits and still save money by switching to these schemes. For those on dated consumer plans who don’t mind taking on a small excess, the savings range from €450 to €650 by switching to the latest corporate schemes.”
Staying with this subject, perhaps the best single tactic you can employ for reducing your health insurance premium is to take on an excess.
“Many consumers are still reluctant to make this change because they are not quite sure what it means,” he says. “By taking on a small excess, which applies per stay in a private hospital only, consumers can save hundreds of euro.”
Mr Goode also says that many consumers mistakenly believe that their insurance excess is per night. However, this is not the case on most insurance plans. Excesses can range from €50 to €150 per claim.
To give you some indication of how making this change can impact the bottom line, going from VHI Health Plus Access to Health Plus Excess saves approximately €200 per adult. Switching from Irish Life Health Level 2 Hospital to 4D Health 5 can save €1,090 per adult, while going from Laya Essential Plus (no excess) to Complete Simplicity to save around €1,840 per adult.
It’s also a little known fact that discounted young adult rates are available on many plans for those aged between 18 and 25.
“Regardless of whether you’re working or still in college, young adults aged 18-25 are entitled to these discounts but only if they’re on the correct plan,” says Goode, who points out that many parents are still covering the cost of their dependents, and because they’re insured on dated plans, they’re actually paying the full adult cost instead of the discounted young adult rate.
“For example, the adult cost upon the Laya Flex 125 Explore scheme is €1,654. As there is no young adult rate on this plan, they will also pay €1,654 for their 18-year-old dependent. However, by moving this dependent to the Laya Simply Connect Plus corporate plan, the cost will reduce to €625 for better overall cover as this plan includes young adult rates. This simple adjustment will save over €1,030 for this young adult dependent alone!”
Of course, downgrading your insurance cover is also an option to help reduce you annual costs — but if you’re considering going this route, then ensure that the savings are worth any loss in cover, and think about whether a lower level of cover suits your needs.
As the Competition and Consumer Protection Commission points out, if you decide to upgrade your cover in the future, waiting periods of up to a maximum of two years can apply for all ages.
During the waiting period, you will not be able to make a claim for extra benefits on your new plan.This depends upon your insurer, so make sure you check before you decrease your cover.
There is more information on the waiting periods that currently apply on the Health Insurance Authority’s (HIA) website, which is an excellent source of independent information.
If you are deciding to switch providers, then be sure to take the time to read your new policy documents carefully and if you have any questions on your cover, contact your provider.
If you are switching to a different insurance provider, you will need to cancel the direct debit to your old insurer.
To stop a direct debit you must cancel it by writing to your bank. You should also contact the third-party supplier — in this case your old insurance provider — to make sure that the direct debit has been cancelled.
If you change your mind after switching, all insurers must provide a 14-day cooling-off period from the start of the contract, during which time you may cancel and get a full refund.
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