6.4% hike in Aviva health policies

A second health insurer is set to ask cash-strapped customers to pay even more for cover, less than a week after politicians were warned a fresh 20%-40% industry hike is on the cards.

Aviva Health Insurance yesterday confirmed it is increasing the cost of its policies by as much as 6.4%, effective from Apr 1.

The move comes after Friday’s announcement from Laya Healthcare that customers will see a 6%-16.5% hike from the same date.

The previous day VHI, Laya, Aviva, and Glo Health had all separately told an Oireachtas health committee meeting hikes of 20-40% are on the cards in the near future due to what they claim are unfair existing Government policies.

The Aviva move is the sixth price increase the firm has imposed in just under two years, following average rises of 14% (Mar 2011), 9% (Aug 2011), 15% (Mar 2012), 2.7% (May 2012) and 7% (Oct 2012).

It will cost the estimated 370,000 customers who currently hold policies with Ireland’s third-largest insurer up to €100 more in some cases.

Confirming the news, a spokesman for the firm said: “Aviva regrets this increase which is due to the impact of legislative changes coupled with the rising cost of claims. Legislation recently approved by the Oireachtas raised the health insurance levy by up to 26.3%.

“The cost of claims paid by Aviva increased by 29% in 2012 compared to 2011.”

The company’s managing director, Alison Burns, said Aviva was “acutely aware many customers are struggling to meet the cost of their health insurance. That is why we have minimised increases on all plans and there are no increases on many of our entry level plans.”

Aviva declined to clarify to the Irish Examiner last week how many of its staff earn more than €100,000, €200,000, €300,000 or €400,000 a year. This included a request for the salary level of Ms Burns.

Aviva’s move, which follows Laya’s decision to hike prices last Friday, is likely to ramp up the pressure on VHI and Glo Health to impose similar rises on customers.

This in turn is expected to further shrink the already- plummeting private health insurance sector, adding yet more pressure on the over- stretched public service.

The Health Insurance Authority has said up to 10,000 people are quitting their health insurance coverage every three months.

In 2005 52% of Irish people had private health insurance. The latest figure stands at 46.3%.