Why auto-renewing your Irish health insurance could cost you €6,000

A range of premium rises are coming into force this month which policy holders need to review, writes John Hearne

Consumers are being advised to look beyond headline premium costs when reviewing their policies. File picture

Irish consumers are being warned to review their health insurance policies immediately, as a combination of premium increases and significant benefit reductions came into effect across the market from April 1.

While policyholders are already familiar with regular price increases, further rate hikes are imminent, with providers including Irish Life Health, Laya Healthcare and Level Health implementing additional increases. This is according to health insurance expert and founder of Health Insurance Ireland, Dermot Goode.

Mr Goode warns that the latest round of changes extends beyond pricing. Substantial reductions in benefits — particularly affecting thousands of Laya Healthcare members — are also being introduced and may go unnoticed by many consumers.

From the start of this month, Laya Healthcare altered cover for major orthopaedic and ophthalmic procedures across about 30 plans. 

For example, the Prosper Advanced plan, which currently offers full cover for procedures such as hip, knee and shoulder replacements, will move to a 40% shortfall for these surgeries in private hospitals. With this plan costing €2,564 per adult, affected members renewing from April could face out-of-pocket costs of up to €6,000 for such procedures.

Other widely held corporate plans, including Prosper Care, Inspire Plus, Inspire, Simply Health Extra and Signify schemes, will also see co-payments for restricted procedures increase from 20% to 40%.

While some consumers may manage a €3,000 shortfall, doubling this cost is likely to place significant financial strain on many households. To make matters worse, alternative options are also becoming less attractive. Plans such as Total Health Extra will retain full orthopaedic cover, but changes from this month include a doubling of the private hospital excess to €300 per admission and a reduced outpatient claims cap of €500 per member.

Outpatient benefits

Meanwhile, plans like Simply Connect and Simply Connect Plus, which have remained popular for their full orthopaedic cover and strong outpatient benefits, will see outpatient excess charges increase from €1 to €10 per claim, despite already rising premiums.

Mr Goode warns that these developments are not isolated. Across the market, insurers including VHI Healthcare and Irish Life Health have already introduced caps on outpatient benefits, while Level Health has reduced benefits on its Plan D offering within months of launch.

Consumers are being advised to look beyond headline premium costs when reviewing their policies.

“Consumers can no longer focus solely on the price of their premium,” says Mr Goode. 

It is critical to examine the details of your policy to ensure benefits are not being reduced or removed. 

"If changes are identified, members should engage directly with their insurer and consider a full review of their cover to ensure it still meets their needs.” 

He points out too that alternative plans may be available. Laya members on plans like Prosper Advanced could consider Simply Connect, Simply Connect Plus, Control 150 Secure, Control 300 Create or Momentum to maintain full orthopaedic cover. The VHI Advanced Care range may also offer suitable alternatives.

“Consumers renewing from April 1 who are moving from a 20% to 40% co-payment may wish to explore the Laya Connect Simplicity corporate scheme, which currently retains a 20% co-payment. However, this plan is also expected to change from May 1, with the higher co-payment applying thereafter.” 

Is switching providers an option? Absolutely, says Mr Goode. “You will receive full credit for your previous membership, so there is no break in cover. However, if you’re increasing your level of cover, you need to be mindful of the two-year upgrade rule, particularly where pre-existing conditions apply, as this could limit your benefits in the short term.” 

The key message here is don’t auto-renew without reviewing your policy in detail or seeking expert advice. Paying higher premiums is difficult enough, but consumers should never accept paying more for reduced cover without exploring all available options.

Impartial advice

There is plenty of free, impartial advice available when it comes to figuring out which policy is the best for you — specifically from the Health Insurance Authority (HIA), which is the State body that regulates the private health insurance market in Ireland.

First of all, ask yourself which benefits are most important to you. Which are most appropriate to your lifestyle and current health needs? For example, if you need regular physiotherapy, you could choose a policy that has good outpatient cover.

Private health insurance policies offer two different types of hospital accommodation: semi-private rooms and private rooms. Semi-private rooms are hospital rooms with up to five beds. Private rooms are hospital rooms with one bed. 

Both are subject to availability, which means that even if you have cover for a private room, you may have to share a room if there are no private rooms available.

Private health insurers in Ireland generally group Irish hospitals into three categories: public hospitals, private hospitals, and high-tech hospitals. The latter group includes the Blackrock Clinic, the Mater Private and the Beacon Hospital. Before buying a health insurance contract, you should check what level of hospital accommodation cover you have.

As the HIA points out, sometimes it’s hard to tell how much you could benefit from private health insurance. It might be useful to think about how often you expect to claim under a particular benefit and work out whether it’s good value for you to have this benefit in your policy.

For example, if you are choosing between a cheaper policy that doesn’t include dental cover and a more expensive policy that includes high dental cover — but you normally only visit the dentist once a year — it might make sense to choose the cheaper policy.

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You also need to think about how much risk you’re willing to retain when you take out health insurance. Sometimes private health insurance contracts include an excess, which is the first part of any insurance claim that you have to pay yourself. You may be able to find a cheaper policy if you are willing to take on the risk of potentially paying an excess. If you are not willing to take this risk, choose a policy without an excess.

If you don’t typically use a lot of outpatient services such as visits to the GP or physiotherapy, you could choose a policy with lower outpatient benefits. This means you’re taking the risk that you won’t require an unusual amount of outpatient services over the life of the policy, but it will also generate a saving on the cost.

If you want to have cover for private care for orthopaedic or ophthalmic treatments, you may want to consider paying more for a policy with these benefits.

Finally, it’s worth pointing out that there are regulated advisors that can help you figure out the most cost-effective policy for your needs. Just make sure to ask about any fees up front.