Health insurer warns of 15% rise in premiums unless levy axed

IN a Mexican stand-off with the Government, Quinn-healthcare has threatened to increase its prices by an average of 15% for 2010 unless a levy on business is removed.

If the Government levy was removed the company said it would freeze its prices for 2010. If not, the company which has 500,000 customers, will hike up its prices by an average of 15% from next January.

“The health insurance levy is forcing us to increase prices in 2010. We believe that it is completely unfair, is making health insurance unaffordable for some consumers, and is designed to support the inefficiencies of the VHI,” claimed Dónal Clancy, general manager, Quinn-healthcare.

“The Government is charging €160 per adult whether you are on a higher priced plan or a low cost starter plan. The levy represents 48% of the premium for the cheapest product in the market and just 6% on higher level plans.”

Health Minister Mary Harney introduced the levy of €160 per adult and €53 per child for everyone taking out private health insurance late last year, after a Supreme Court decision struck down the risk equalisation scheme. The Government also put forward additional tax relief for health insurance starting for people aged 50 and over and increasing for higher age groups.

The levy is reducing the number of new customers to the market and “forcing existing customers to leave the market because they can’t afford it,” Mr Clancy said.

He described the levy as “a stealth tax”. While he fully supported a community rating, he didn’t believe that the VHI required any compensation from its competitors for its older book “as they enjoy a higher average premium per member”.

Should the Government increase the levy in the December budget, Quinn-healthcare will in turn pass this increase on to consumers.

“Of course, if the Government sees sense and decides to reduce or remove the levy altogether, then we will pass those savings on to our consumers,” Mr Clancy said.