Private health cover enters ‘uncharted waters’

HOSPITAL consultants aligned to the VHI would have to work free for a year and treat approximately 700,000 patients, if the insurer was to absorb the additional costs it faces under proposals contained in the budget, VHI said yesterday.

The government plans include:

* A further increase in the charges for private beds in public hospitals — these charges were already hiked by 21% in January by former health minister Mary Harney, as was the health insurance levy, which was hiked by 11%, and now costs €205 per adult and €66 per child.

* An end to the state subsidising the cost of private beds in public hospitals, meaning additional costs for the patients, passed on by the private health insurer.

* An end to the practice whereby private patients allocated public beds in public hospitals are not charged. Instead, legislation is to be introduced which will allow them to be charged. A spokes-person for health minister Dr James Reilly said yesterday the legislation would be moved sometime next year.

Dermot Goode, an expert in private health insurance and founder of the website healthinsurancesavings.ie, said the market was entering into “all kinds of uncharted waters”.

“It’s completely unprecedented. I know the Government has been moving to recover the full economic cost of beds used by private patients in public hospitals, but we are reaching a situation where it is going to be more expensive for a private patient to be treated in a public hospital than a private hospital.

“It terms of when or how this legislation will be introduced and its cost implications — all we can do is speculate.

“I would say the insurance companies are looking at this very nervously and you would have to ask why in God’s name any new insurer would consider entering the market with this level of uncertainty.”

Mr Goode predicted a continuation of the current “dramatic rate of cancellation” of private health insurance policies, particularly with the VHI predicting a 50% hike in premiums under the budget proposals.

This is based on figures in a report by the Comptroller and Auditor General which said approximately half of patients who go through A&E are private patients who end up in public beds and therefore should be charged for their stay. Currently only 20% of beds are deemed private or semi-private and therefore chargeable .

A spokesperson for Dr Reilly said VHI could make more savings by reducing claims costs which could be done by more efficient patient flows through hospitals, as envisaged in the Milliman Review of VHI claims costs control. He said the minister was going to commission Milliman to do a second review of claims costs by the VHI early in the New Year “to get them on a downward trajectory”.