Budget ‘will only hit gold-plated health policies’
The department said all numbers and costs used in Michael Noonan’s budget came from the Revenue Commissioners and “these statistics are drawn from the tax relief at source system for health insurance that they operate”.
The department re-stated that “the vast majority of families with standard premiums will not be affected by this change”.
Earlier this week, consumer groups revealed an elderly person could face premium hikes of up to €470 per person when they renew their health insurance and up to 90% of health insurance users will be affected by the cuts to tax relief.
They said the changes will mean premium hikes of 3% to 20% for customers as the industry average premium is a gross rate of €1,500.
But the department said yesterday that the Revenue Commissioners estimate just 577,000 of the country’s 1.09m people with private health insurance will be affected.
A spokesperson said: “Those able to afford higher public health insurance costs will, if they wish to continue with their current policies, bear the larger proportion of the impact. The vast majority of families with standard premiums will not be affected by this change and will continue to receive tax relief towards the cost of their private health insurance. Individuals can opt for less expensive policies if they wish to avoid the impact of this measure entirely or can shop around for cheaper but equal cover that suits their needs.”
Revenue estimates that it will pay €500m in tax relief this year to 1.09m private health insurance customers.
However, under the changes planned in this week’s budget, this figure will fall by €94m next year and by €127m in a full year.
Dermot Goode of healthinsurancesavings.ie said middle-ranking health insurance customers, typically on level 2 VHI; Laya Healthcare’s Essential Plus; and Aviva’s Level 2 Hospital, are facing premium hikes of about €180-€250 per year.
Level 2 plans are described as the “Ford Focus” of health insurance and are held by 80% of customers.
