Fears health premiums set to soar

There are now fears of spiralling health insurance premiums after Aviva’s announcement that it is to increase charges across a range of plans this summer.

Fears health premiums set to soar

Aviva said yesterday it was increasing its premiums by an average of 5.5% on 106 plans. However, some will increase by as much as 15%.

Just weeks ago around 74,000 additional people took out health insurance to avoid late entry penalties — the number of people with insurance now stands at 2,105,000.

Dermot Wells, general manager of the health division of Cornmarket Group Financial Services, said the Aviva increase was not surprising.

“I had predicted some weeks back that we would see increasing premiums,” he said.

Aviva said that, despite the welcome influx of new customers into the market as a result of Lifetime Community Rating (LCR), the increase from July was necessary to pay members’ claims.

It pointed out that the average claims cost per customer had increased by 6.3% last year, compared to 2013.

Aviva already increased premiums in January.

Mr Wells said there would be more price increases because nearly all premiums collected by insurers are paid out in claims: “In 2013, €2.3bn worth of premiums were collected across the market but €2.15bn was paid out in claims. Add in expenses and other costs and it is clear that margins are very tight.

“Until we see further reductions in the health levy, bed charges reductions and increases in tax relief, premiums will continue to be challenged.

“The industry needs the support of the minister to help create an environment that can produce consistent lower premiums.”

Health Minister Leo Varadkar told a meeting of the Oireachtas Health Committee earlier this month that his officials were working on proposals to improve affordability.

“I believe that health insurance needs to be made more affordable before we consider how it could be made universal,” he said.

Both Laya and the VHI said yesterday they had no plans to raise premiums but experts expect further increases in the autumn.

Insurance companies only have to give one month’s notice of price increases.

Leading health insurance analyst with Totalhealthcover.ie, Dermot Goode, said Aviva’s Health Value Plan for a family of two adults and two children would cost an extra €227 from July while a higher grade plan — Select More, would cost €470 more.

He expected the price of all the ‘yellow pack’ plans introduced to coincide with the implementation of Lifetime Community Rating to be increased over the coming weeks: “It will make a lot of people think twice about taking out health insurance and that is not good news.”

Mr Goode said when Laya introduces new plans on Monday there will be 390 plans on the market. “and consumers can find that hidden among the products are great offers with huge potential for cost savings”.


More in this section

Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Let Me Tell You

Let Me Tell You is a new bespoke podcast series from 

Logo IE

Hosts Daniel McConnell and Paul Hosford take a look back at some of the most dramatic moments in recent Irish political history from the unique perspective of one of the key players involved.

Bespoke political podcast series from

Logo IE
Execution Time: 0.234 s