VHI prices to rise by an average of 9%

The surge away from private health insurance is set to increase again, after VHI announced plans to hike its prices by an average of 9% from next month.

In more bad news for already struggling families, which means some plans cost 65% more now than just 12 months ago, the major insurer said the hike is unavoidable if the “loss making” company is to survive.

VHI chief executive Declan Moran — who earns over €200,000 a year — said he is “acutely aware of the enormous financial pressures” on customers and has “endeavoured to keep the price increases as low as possible”.

However, independent experts have noted the average 9% price rise from Mar 1 means the cost of some policies has risen by 65% in just 12 months.

Under the move, the cost of all VHI policies will increase by between 6% and 12.5% within four weeks.

VHI said the latest price hike is needed because the average cost of treatment to the company per customer has risen by 15% since 2009 — from €851 to €980 — and the high cost of drugs.

While the company said the average increase is 9% per policy, Dermot Goode of healthinsurancesavings.ie said the reality is far more worrying for the public.

The independent expert said since Jan 2011, the price of VHI’s Plan B Options/ Health Plus Extra package has risen by 65%, and its Plan B/ Health Plus Access by 50% due to three separate increases.

He said that — coupled with a 23% average rise in Jan 2009, an 8% rise in Feb 2010, a 15% to 45% rise in Feb 2011 and a 2% rise last Nov — the latest hikes could force 100,000 more people to quit their coverage.

Quinn Healthcare also announced hikes of 7%-25% and 6% in Jan, following previous rises of 19% in Jan 2010, 13% in Jan 2011 and 8% in Apr 2011. Aviva Health Insurance customers have faced hikes of 14% in Oct 2009, 5% in May 2010 and 14% in Mar 2011.

Health Minister James Reilly said he would speak directly to all health insurers over the latest increases at an imminent meeting of the Health Insurance Forum.

However, this is highly unlikely to lead to any relief for customers.

A spokesperson for the minister said the forum is focussed on medium to long term ways to cut hospital costs for insurance firms, with a particular focus on patients arriving on the day of treatment. An increase in competition in the market is also being discussed, which is expected to force premiums down and lead to the full rolling out of his universal health insurance plan.

However, these potential changes will have no effect on recent or future price hikes, which are forcing 5,000 people every month to quit their coverage.

Fianna Fáil health spokesperson Billy Kelleher claimed the policies being pursued by Mr Reilly are causing the crisis. “By the minister’s own admission universal health insurance is a 10 year project. Are people really expected to face staggering price increases for a decade?” he asked.

* Independent information is available at www.hia.ie

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