Rise in insurance costs can be delayed but can’t be avoided
Last year, levies rose 11%, but the latest hike of almost 40% will undoubtedly lead to further premium increases. Already, Quinn Healthcare has increased its standard plans by an average of 12% and Aviva has announced its plans are to increase by 15% from February 15 next. VHI announced a 2% price hike in November and we can expect a further increase sometime in the first quarter. Some of its corporate plans have already been increased by up to 15%.
These levy hikes, together with the 4% average increase in public hospital charges, have a direct impact on the health insurers as these charges are effective immediately. However, it can take up to two years for the insurers to reap the full benefit of any premium increases, which is a major challenge for them. While they will try to absorb some of these increases, the reality is that at some stage they will have to pass them on to consumers, many of whom are already struggling to pay their premiums.
