Consumers are shooting themselves in the foot by not shopping around for health insurance, a financial expert has warned.
Dermot Wells, general manager of Cornmarket Financial Services, said Vhi’s 3% average price increase, up to a maximum of 6%, followed a 2% increase last November.
He pointed out GloHealth recently announced the premiums of their Base, Base Lite and Initiate plans will rise by 10% from April 15, while Laya had also signalled price increases in some of their plans by up to 11% from today.
“What we are currently seeing is a correction of pricing to better reflect the claims experience by insurance companies relating to the benefits available on particular plans,” said Mr Wells.
Despite the best efforts of insurers to create efficiencies, claims costs were rising and he expected to see further increases announced on plans in the coming months. But it was not all doom and gloom, as several insurers had reduced the price on other plans within their range, he pointed out. GloHealth recently reduced the pricing on some of their plans by up to 6%, Laya by up to 7%, and AvivaHealth by up to 10%. Corporate plan equivalents also offered great value.
“Consumers are shooting themselves in the foot by not shopping around,” Mr Wells said.
He said it was not unusual to see a family of two adults and two children, who have been on the same plan for two years, save up to €800 by reviewing their cover.
Mr Wells said it was crucial consumers also got the right cover as there was a two-year upgrade rule that they should be aware of. “If consumers downgrade their cover, or indeed are on a basic plan and wish to increase their cover, a two-year upgrade rule applies to the increased benefits relating to existing illnesses.”
Colette O’Donohoe, health insurance expert with McCarthy Insurance Group, said the price increases, although more frequent, were not as severe as the hikes of between 20% and 40% some years ago.
She said the Health Insurance Authority found that only 24% of people had switched their insurance providers in the past, so there were potentially a lot of people paying too much for cover.
The health insurance market grew by 97,000 people to just over two million last year, with 74,000 purchasing in-patient insurance plans in the run-up to the Lifetime Community Rating deadline.
Ms O’Donoghue said it was crucial people knew what they were covered for and gave the following cover reviewing tips.
Dermot Goode, a health insurance expert with totalhealthcover.ie, said he expected nearly all insurers to increase their prices every six months.
“Rather than having just one big price increase, they are having smaller, incremental increases,” he said.
Mr Goode warned people, who did not shop around or change their plans, to brace themselves for price rises of between 5% and 7% each year.
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