VHI price increase to be the sixth since recession took hold
Despite insisting it is “aware of the financial pressures facing our customers,” the largest insurer in the country confirmed the price hike will be imposed from Nov 22.
The increase will result in annual rises of close to €100 for some plans, although a VHI spokesperson said the cost for its two most popular family policies will be between €55 and €83.
The move follows increases of 23% in Jan 2009, 8% in Feb 2010, 15%-45% in Feb 2011, 2% in Nov 2011, and 6%-12.5% seven months ago.
During the same recession-era period, one in six of the company’s members have ended their coverage, accounting for a 250,000-person slump that critics claim is linked to the rising cost of health insurance.
In a statement confirming the news, a VHI spokesperson said the latest price hike is needed “to ensure we can continue to cover the healthcare needs of our customers.
“VHI is aware of the financial pressures facing our customers and our objective has been to keep the price increase as low as possible,” the spokesperson said.
“The key factor driving the increase is that we need to price policies in order to ensure we can continue to cover the healthcare needs of our customers.
“In 2011, VHI spent €1.2bn on meeting our customers’ healthcare needs and we expect this to increase by a minimum of 6% in 2012.
“To be sustainable in the long-term VHI needs to price its premiums to reflect the actual cost of delivering healthcare.”
Among the reasons put forward for the latest increase are the cost of public hospitals and the fact health insurance prices are rising because people with chronic illnesses are living longer.
Since the economic crisis began, health insurance has increasingly been seen as a luxury many potential patients can no longer afford.
Latest figures show an average of 6,000 people are cancelling their coverage across all insurers every week, including 90,000 from Jan 2011 to March this year.
The number of people with health insurance is currently 2.1m, the lowest since summer 2006.
The Consumers’ Association of Ireland and independent insurance experts have repeatedly warned that the sector is effectively stuck in a loop, with customers leaving due to costs.
This forces firms to increase prices for loyal customers to cover the gap, putting this second group of customers under further pressure to cancel their premiums.
The price rises problem is not confined to VHI.
Laya Healthcare (formerly Quinn Healthcare) has increased prices by 71% through five rises since the start of 2010.
Aviva Health Insurance has imposed seven separate price rises since autumn 2009. Three of these increases, which mean some policies cost 66.7% more now than they did three years ago, have occurred since March.
* For independent advice, contact the Health Insurance Authority at hia.ie or call 1850 929166.
