Gilmore attacks Laya healthcare’s plans to hike charges by up to 20%

Ireland’s second largest private health insurer, Laya healthcare, is to hike its charges by an average of 20%.

Laya’s announcement comes a day after Vhi Healthcare said it would be increasing prices across a number of its plans by an average of 3% on Mar 1.

Tánaiste Eamon Gilmore criticised the hikes, saying the last thing hard-pressed families need is a hike in private health insurance.

The company said premium costs were driven upwards primarily by government policy changes and the rising cost of claims.

“At a time of increasing competition in the market and with new players seeing the opportunity for themselves, I share the wonder expressed by many people as to why prices are going up and not down,” said Mr Gilmore,

He was responding to Fianna Fáil health spokesman Billy Kelleher, who said that Mr Gilmore should stop wondering and take responsibility for the escalating costs.

He called on Michael Noonan, the finance minister, to reverse the cap on tax relief introduced in the last budget, which he described as “an attack on ordinary families”.

At the time, Mr Noonan claimed it would only affect “gold-plated” policies, but it pushed up the average family plan by up to €350 a year.

However, Mr Gilmore reiterated that the Government has no legal power to intervene in price-setting.

Laya’s last price rise was in April last year. The insurer has almost 500,000 customers.

Laya’s managing director, Dónal Clancy, said the company was very conscious of the impact the market was having on its members.

“Unfortunately, the market has come under unprecedented pressure from major increases by the Government, specifically further hikes to the government health levy and the public beds re-designation charge.”

Mr Clancy said the cost of the health levy to Laya healthcare would be around €72m this year — a 33% increase compared with last year.

“The public beds charge will also significantly impact our business, costing the health insurance industry as a whole around €130m in 2014. We are forced to pass on these charges to our hard-pressed members.”

Mr Kelleher claimed more than 6,000 people a month were giving up their private health insurance.

The Cork TD said families had to decide whether “to not fill the tank with oil or gas or make other basic cuts in household expenditure in order to fund that private health insurance”.

The Tánaiste said James Reilly, the health minister, had set up a consultative forum headed by Pat McLoughlin, and the Government was determined to get to the bottom of what was driving the rising cost of health insurance.