VHI to increase premiums by 3% expecting a surge in claims

Second increase in less than a year could see an extra €87 per month for a small family
VHI to increase premiums by 3% expecting a surge in claims

Vhi said they expect significant pent-up demand for health procedures when the pandemic abates.

Vhi has announced its second price increase within 12 months blaming the impact of Covid and an expected surge in demand for procedures when pandemic restrictions are lifted.

Ireland's largest health insurer said the price of policies across a range of plans will increase by an average of 3% from April 1.

The increase comes despite insurance claims falling last year as a result of the reduced access to healthcare because of the pandemic. The Vhi said it waived premiums for customers on two separate occasions over the last 12 months returning €265m to customers.

Vhi has more than 1.12 million customers. It brought in €1.41bn in premium in 2019 and paid out €1.38bn in claims. The insurer said the price rise is necessary as the cost of healthcare is increasing due to the extra infection controls caused by Covid-19 and increased access to new drugs and procedures. “Despite the fact that claims were down in 2020, the cost of delivering care to those who avail of it continues to rise," Vhi Director Declan Moran said.

"There will be significant pent-up demand across all parts of the healthcare system and we need to look to the future to ensure that we can deliver that care to customers, not just this year but over the next number of years." 

Vhi said they were aware some customers would experience a price increase having just received money back but said pricing and waivers were determined by "different factors". "Premium waivers are informed by historic behaviour. We look back on the claims experience and where claims are below what we forecast, we return value to our customers. Pricing looks forward and anticipates future healthcare needs and related claims costs."

Speaking to the Irish Examiner health insurance consultant Dermot Goode said the price increase will cost a family of two adults and two children an extra €87 per year on a mid-level plan such as the VHI One Plan Family or up to €224 on a dated plan such as the Family Plan Plus Level 1.

"This latest price increase isn’t surprising given the upward pressure on claims costs that we’re hearing from all insurers across the board," he said. "People should examine their policies carefully. This is an average 3% rise across the Vhi but some policies will see increases of 6% and even 7.5%."

"Similar price increases have been announced by other insurers in recent months. They are preparing for a surge in claims as members who were unable to have procedures last year proceed with treatment this year once restrictions are lifted."

Mr Goode advised Vhi members who are due to renew on or after April 1 to start the review process now to see if they can get better value cover by switching insurer or securing a more appropriate policy with Vhi in order to avoid these price hikes.

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