Health insurance ‘to drop below 2m members’

The number of people with private health insurance will fall below two million during the first half of next year, a personal finance expert has predicted.

Reduced levies, a spate of premium increases and reduced tax relief have all contributed to the continuing exodus of people from the market this year.

“Last year, 65,000 people cancelled their cover and we are on course for another 65,000 to cancel their cover this year,” said Dermot Goode of Healthinsurancesavings.ie.

“Within the next six months, it is highly likely that we will fall below 2m members for the first time,” he said.

At the end of September, there were 2,047,000 people insured with private insurance in-patient plans, according to latest figures from the Health Insurance Authority.

It pointed out that over the three-month period July to September, 11,000 people cancelled their health insurance policy and 62,000 over the previous 12 months.

Mr Goode said that over 250,000 people cancelled their insurance cover since 2008 when the market peaked at almost 2.3m.

“As one of the insurance companies described it, we are in a death spiral and this information simply proves that we are still on the same course.

“While the number of people cancelling their insurance cover is becoming a problem, it is still the profile of those leaving that is very worrying.

“It tends to be the younger, healthier people aged between 25 and 34 who are cancelling their cover and they are the very ones we need in a community-rated system,” warned Mr Goode.

Latest ESRI figures show an ongoing increase in the proportion of public patients treated in public hospitals and a slight decrease in the proportion of private patients.

Mr Goode said that there was a serious risk that one or more private hospitals would close next year because of the fall in the number of people with health insurance.

People with health insurance are already facing increased costs because of the reduction of tax relief on annual premiums announced in October’s budget.

Mr Goode said the reduction in tax relief would have a huge impact, with 90% of policyholders affected. More premium increases are also coming down the line.

He said he expected that as many as 100,000 people would end up cancelling their private health cover next year.

Mr Goode said the people giving up their private health insurance would be relying on an already over- burdened public health system.

Around 400,000 people are due to renew their policies next month and Mr Goode advised those in that position to review their cover and reduce their premiums.

With Christmas just two weeks away, there was a risk that people would forget about the need to consider their health insurance renewal.