State aims to curb premium hikes

Cash-strapped patients could face yet more health insurance price hikes in the coming weeks, despite fresh Government attempts to force down market costs.

Health Minister Leo Varadkar admitted prices could go up as he announced legislation to bring insurance premiums under control.

He confirmed stamp duty paid by insurers will freeze from March and will reduce for some “non-advanced” coverage. The health insurance levy directly affecting private patients will also fall, from 0.12% to 0.01%.

In addition, Mr Varadkar said the new legislation will allow insurers to give people aged 18-25 up to 50% off “discount” deals as an incentive for them to keep their coverage. To balance the books, people aged over 35 seeking insurance for the first time or after a 13 week gap will be hit with higher costs, ranging from 2% for 35-year-olds to up to 70% for 69-year-olds.

While the latter two points were announced by previous health minister Dr James Reilly in May, Dr Varadkar said all four policy switches were central to “one of my objectives” to bring the market under control. He said the moves were likely to mean “the era of double digit increases is over”.

However, speaking at the Royal College of Physicians in Ireland after meeting health insurance firms, he admitted the companies have given no guarantee they will pass on the savings.

“I can’t say that [when costs will be reduced] for certain, but I do know that what’s been happening over the last number of years is health insurance has been going up every year, and as a result less people are covered. There are a lot of other factors — the number of claims, medical inflation and so on — but at least as far as Government policy is concerned we’re going to try and create a better environment so the industry can keep premiums down.

“I had a good meeting with them [the insurers] today. They did of course point out there are other variables and other factors at play, so they can’t give a cast-iron commitment, but I do think it does represent a change.

“It’s too early to say [in terms of price cuts], but my expectation is the era of double digit increases is over, and if there are going to be increases in future they are going to be small single digit increases, if at all.”

Independent health insurance expert Dermot Goode of totalhealthcover.ie said the moves did not go far enough.

“It’s a pity the minister didn’t look at restoring the tax relief ... the levy reductions will only benefit those with public hospital plans, which only really accounts for 10-15% of the overall market. We would also strongly recommend that the minister widens the band for younger people to receive discounts from 21-24 to 21-29.

“The biggest area for concern with these planned reforms is it looks like the majority won’t be implemented until March 2015.

“However, 45% of health insurance policy holders will renew on January 1 so if these changes are to have a meaningful effect they need to be introduced before this date. I don’t want to be overly critical, but many more steps need to be taken.”

Health insurers representative body Insurance Ireland said it looked forward to working further with Mr Varadkar.

Laya Healthcare CEO Donal Clancy, said his firm “will need to digest and review the full implications of the plans before commenting further”.

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