Health insurance is a topic I have covered in the past but it is worth returning to as a number of recent developments in the market could mean good news for consumers, writes.
After years of rising prices the first reductions by health insurance providers were seen in the autumn of 2017. The percentage cuts were not dramatic and reductions were limited to specific plans rather than across the board but it was a step in the right direction.
Further reductions were announced this month by one of the main players in the market and health insurance expert Dermot Goode is hopeful it could lead to a price war, with customers the ultimate beneficiaries. “VHI put it up to the competition on March 1 with significant price cuts across most of their plans, following on from some minor rate reductions last November,” he said. “Based on past experience, we are anticipating a quick reaction from the likes of Irish Life Health and Laya Healthcare, as they will want to protect their existing customer base while continuing to attract new members.”
Irish Life Health has already announced some price reductions on entry-level plans and Laya Healthcare has announced an expansion of its free cover offer for children under 18 — both from April 1: “These initiatives and the possibility of further rate cuts is welcome news for hard- pressed consumers who have been hit with multiple hikes in premiums in recent years.”
That is the good news but the bad news is the cuts do not mean those with existing policies can just sit back. They will still need to ensure they are on the most suitable plan, which could involve switching, something consumers are notoriously slow to do, despite the benefits.
Mr Goode, a consultant with www.totalhealthcover.ie, suggests those who have policies with renewal dates approaching should keep an eye out for further announcements.
“My advice would be to watch this space as there will undoubtedly be a reaction from the other insurers,” he said. “This is the closest we’ve ever been to a real price war in health insurance and it is long overdue.”
He also believes it is a good opportunity for those without cover to reconsider: “For consumers, this means there will never be a better time to consider buying health insurance.”
The market in Ireland is big and growing. In 2017, the Health Insurance Authority (HIA) reported that 2.15 million people or almost 46% of the population have private health cover. Anyone who waits until they are 35 or older to take out cover will have a loading added to the cost, an additional 2% for every year after 35.
This can be off-putting for people who are trying to balance household budgets but the loading will only increase the longer you wait. If health cover is something you have been considering, start at the www.hia.ie site. There is a search tool on the site which allows you to compare plans from across the Irish market.
You start by choosing the level of cover — from ‘semi-private or private room in a public hospital’ to ‘private room in a hi-tech hospital’. If cost is your overriding concern it is worth remembering that there is no guarantee a private room will be available if you have to go to hospital, so choosing ‘semi-private room’ will reduce your costs. You can then further refine your search based on the amount you want to pay, the excess you want on the cover and a number of other variables.
The sheer number of plans on offer can be mind-boggling; the HIA site also has a number of explainers and useful guides. Remember, even though some plans are marketed towards specific groups, you are entitled to request a plan, regardless of whether or not you are a member of the group to whom it is being marketed. Don’t be put off by ‘corporate’ or other terms in the name.
If it all sounds too much, you can use a financial advisor to help get the right plan. The HIA advises customers to ask about fees and charges before choosing one, as some “may be paid a commission or sales incentive by the insurance company they represent”. However, a regulated financial advisor must act in your best interest, must make sure the product they recommend or offer is suitable and must be able to show you why they feel it is suitable for you.