Aviva raising premiums by up to 20%, costing families an extra €700
Private health insurers cannot justify repeatedly hiking prices at the expense of people who can no longer afford the potentially life-saving cover, Health Minister Dr James Reilly has warned.
He made the claim after Aviva health insurance said it is raising premiums by an average of 12.7% from March 23 — with some policies increasing by 20%.
The controversial move, which is set to cost families an extra €700 a year, is the second time in just six weeks the company has increased rates, following a 5.3% average hike last month.
While rivals Glo Health, Laya Healthcare and VHI are not planning similar ‘double down’ increases, all raised their prices significantly at the start of this year — following a trend that has seen some policy costs more than double since the recession began.
The situation is forcing thousands of people to cancel their coverage, meaning they risk being unable to access vital care when it is needed most.
In recent months, Dr Reilly has told the Oireachtas Health Committee he is opposed to the hikes, saying the approach risks destroying the market and is putting an undue strain on the public service.
Hitting out at the latest increase, he said next month’s Aviva price rise is unacceptable and is unduly hurting patients.
“These high premium increases are not justified,” a spokesperson for the minister said. “The minister has been strongly seeking much greater cost control in the private health insurance industry. He has consistently raised the issue of costs with health insurers on an ongoing basis and is determined to address costs in the sector in the interests of consumers,” he added.
In a statement that is| strikingly similar to previous premium rise announcements, Aviva’s chief executive, Alison Burns, said she “regrets” the need for the price hikes, but said government policies are to blame.
Ms Burns said among these issues is the Coalition’s decision to charge insurers more for using public beds in public hospitals; capping health insurance tax relief; and stamp duty changes.
However, keeping with previous statements, the Department of Health contradicted the claims, saying the polices are needed to shore up the public health service and cost private insurers a fraction of what is being suggested.
In a bid to address the repeated price hikes problem, Dr Reilly appointed an independent chair, Pat McLoughlin — to oversee discussions between the department, health insurers and watchdog group the Health Insurance Authority on the issue.
It is expected final conclusions on how to reduce costs to consumers will be completed by the end of May.
In addition to Aviva’s double price hike this year, all three of its rival health insurers have also chosen to raise prices.
VHI will raise prices by an average of 3% next month, with some policies increasing by 8%.
Laya healthcare is also implementing an average 20% price hike next month, with some rates rising by a massive 40%, while Glo Health policy costs increased by 5% at the end of January.
Health Insurance Authority figures due to be released next week will show 47,000 more people cancelled their coverage last year, despite a 4,000-person increase between October and December — the first quarterly rise in three years.
Total health insurance coverage rates have slumped from 2.297m people in December 2008 to just 2.052m in December 2013.
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