Shop around before renewing your health insurance

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
Shop around before renewing your health insurance

Three out of five health insurance members are believed to be on the wrong plan.

Earlier this month, VHI became the first health insurer to implement a second swathe of rebates in recognition of the lower number of claims during the lockdown.

Back in March, when the Private Hospitals Association agreed to make private hospitals available to public health services in order to combat the Covid pandemic, access to the private health system was more or less closed off, and this in turn saw health claims drop off a cliff. Hence the first rebate.

In its latest statement, VHI said: ‘When the waiver was announced, we committed to return additional value to our customers if claims were lower than the level anticipated in April because of Covid-19. 

"Following a review of claims activity over the past six months, we are now delivering on that promise and all VHI private medical insurance policyholders (excluding HealthSteps and Plan P) will benefit from another waiver of premium to the value of €75 per adult and €25 per child.”

Dermot Goode of TotalHealthCover.ie welcomes the news.

“The average family of two adults and two children, as members of VHI will, on 23 January, get a once-off bonus of €200. The more members you have on the policy, the higher the rebate you will receive. Also, the rebate is the same for all members irrespective of which plan you have.

Those on company-paid group schemes should note that they will also still benefit from this through reduced benefit in kind.

“Admittedly, this is an unexpected development given the upward trend of rates generally in the market, but it is absolutely good news for all VHI members — and it couldn’t have come at a better time.”

Will the rest of the insurers follow suit? Watch this space.

In the meantime, the Health Insurance Authority (HIA) is encouraging consumers to review their health insurance policy before they renew. They point out that over one million consumers are due to renew their health insurance in the coming months and could miss out on significant savings if they fail to review their policies.

Don Gallagher, chief executive of the HIA, says that approximately 50% of health insurance policies will be up for renewal in the next three months.

“We are encouraging consumers to give themselves plenty of time to consider their options by giving their health insurance policy a health check now.”

He advises you start by reviewing your existing policy. 

  • Is it offering you the appropriate cover you need for your stage of life? 
  • Does it cover all the treatments you and your family need? 
  • Is there another plan with your existing provider or another health insurance provider that may suit you better?

“Health insurance policies can be hard to understand,” says Mr Gallagher, “and knowing what you should look out for is often difficult to figure out. The HIA has simple, free tools available on their website, including a useful jargon buster to help you understand the details of your policy, and a comparison tool where you can compare plans to help make an informed decision on whether to renew your policy or switch.”

The HIA provides free, independent information for consumers to help them navigate the often-complex world of health insurance policies. Whether reviewing or considering purchasing a health insurance policy for the first time, the HIA has five simple steps for consumers.

First, set a budget. Although the average cost of a plan is €1,200 per annum, basic plans start from €500.

Second, prioritise your needs. Assess what you need and what you want covered by your plan.

Third, if your budget is under pressure, consider upping the excess, which is the first part of the claim that you, rather than your insurer, have to pay. Excesses can range from €50 to €600 and increasing your excess will reduce your premium.

Fourth is the standard advice: Shop around. Comparing plans across providers can result in better benefits or a cheaper premium.

And finally, go visit HIA.ie.

As Dermot Goode points out, despite the rebates, health insurance premiums in general are on the rise.

He agrees that shopping around is vital for anyone who wants to save themselves hundreds — if not thousands — next year.

“If you’re on the same plan for three years or more, or are paying more than €1,800 per adult, or if you don’t have a small excess on your policy, then you’re at risk of over-paying and a review of your cover is definitely recommended.”

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.

"People are still unaware that they are eligible for corporate plans and they are confused at how the excesses work in private hospitals.

"These are always per claim, never per night. We advise all consumers to either get good advice or do your homework before engaging with the insurer, because once you request a specific plan by name, all insurers will then go through this with you in detail to assess its suitability to your needs.”

Don’t let fear of change or inertia hold you back. Saving between €500 and €1,000 on your annual bill could cover your car and home insurance for another year.

Mr Goode estimates that three out of five health insurance members are on the wrong plan, and points out that January, with all its distractions, is one of the worst times of the year to renew. People invariably just let their cover roll over automatically.

Downgrading your cover is also an option of course, but if you’re considering this, make sure 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 on your insurer, so make sure you check before you decrease your cover. There is more information on the waiting periods that apply on the HIA’s website, which is an excellent source of independent information.

If you are switching providers, 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.

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