Spiralling claims costs sees health insurance prices rise

The spiralling cost of claims, particularly public hospital claims, are blamed by the VHI for its latest premium hike of an average of 3% across a range of plans.

Health insurance expert, Dermot Goode, warns that Ireland is heading back to the “bad old days” of regular private health insurance price increases.

Mr Goode, a health insurance analyst with totalhealthcover.ie, said some health insurance companies are raising prices twice a year, and in some cases, more often.

“It is a worrying trend and the Minister for Health, Simon Harris, has yet to decide whether he will increase health insurance levies and, if he does, they will get passed on to consumers as well.”

The VHI director of marketing and business development, Declan Moran, said the company has sought to keep the price increase as small as possible without compromising cover: “The main reason for the price increase is the rising cost of claims and, in particular, the rising cost of claims in public hospitals. We are constantly reviewing our health insurance plans to ensure they are comprehensive and relevant.”

Mr Goode said it was no surprise that VHI was increasing the cost of its plans from November 1. “What is really worrying is that the main driver behind this price increase appears to be public hospitals.”

People with health insurance who opt to be treated as a private patient when admitted to a public hospital can be charged between €813 and €1,000 a night.

The statutory charge for overnight and day in-patient services is €75 a day up to a maximum of €750 in any 12 consecutive months.

However, the €75 charge does not apply to medical card holders and other patient groups.

Mr Goode said all public hospitals now ask patients with private health cover to sign a form so their insurance companies can be billed.

According to the Health Insurance Authority, VHI has 53% of the private health insurance market, but 83% of the insured population is over 80 years of age.

The number of people insured at the end of last year was 2.12m or 46% of the population. There was an increase of 97,000 on 2014.

The increase was due to a combination of factors, including rising employment and the introduction of lifetime community rating (LCR).

Under LCR, community rating is modified to reflect the age at which a person takes out private health insurance.

Mr Goode said the latest premium hike is a wake-up call for everybody.

“Don’t just automatically renew your cover. You might be very surprised by what is out there — you could avoid the price increases altogether.”

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