Families facing €1,250 increase in private health insurance premiums

FAMILIES could face a €1,250 hike on the average health insurance plan on the back of yesterday’s budget.

Health Minister James Reilly announced plans to abolish a subsidy for private medical treatment in public hospitals.

Public hospitals cannot currently charge private patients who occupy public beds, which Dr Reilly said represents a loss of income to the hospital system and provides a significant subsidy to private insurance companies.

But VHI Healthcare warned the change would result in a doubling in what it pays for customers attending public hospitals — resulting in a premium increase of at least 50%.

That would result in a €1,250 rise on the average plan for two adults and two children, which currently costs €2,500.

VHI Healthcare chief executive Declan Moran said the change would put further pressure on the public hospital system.

“The evidence suggests the insured population simply cannot afford such an increase and we have no doubt that this will hasten the fall in the number of those choosing private health insurance,” he said.

Dr Reilly said that legislation will be introduced next year to allow public hospitals to raise charges in respect of all private patients.

He acknowledged that the regime would have a significant impact on private health insurance premiums but said the arrangements would provide much-needed extra income for public hospitals.

He said the charges for private beds in public hospitals would result in a saving of €143 million next year and €268m in a full year.

“The new system is fairer and entirely in keeping with the charges required along the road to universal health insurance. Removing this subsidy to private patients will help to protect services for public patients.”

Aviva Health called for consultation on the proposal to increase hospital bed charges in public hospitals.

Managing director Siobhán Fay said the company was concerned the change would put the cost of health premiums beyond people’s reach, leaving them no option but to fall back on a struggling public health service.