Health insurance bills to soar

Health insurance bills will soar in the new year, it was revealed today.

The country's two main insurers, Vhi and Quinn Healthcare, blamed rising costs for hikes of up to a quarter for some patients.

Charges at the State-owned Vhi will jump by an average of 23% while Quinn customers are facing a 16% fee increase for medical cover from January.

Jimmy Tolan, Vhi Healthcare chief executive, said he realised the rise would impact patients already struggling in difficult economic times.

“But we also have to ensure that we continue to meet the costs of our customers’ medical care needs,” he said.

The State-owned insurer said it was facing €60m losses this year, as it paid out €30m more than it gets in premiums.

It has also lost €30m in investments.

Other issues include a jump in the cost of services in public and private hospitals and a rise in demand for medical care, it said.

Vhi – the state’s largest health insurer – said it has paid out an average of €745 to each customer this year, compared with around €350 to €450 by competitors.

Quinn Healthcare said its increases will range from between 10% and 19% depending on the type of policy.

It blamed the price hike on Government plans to increase hospital charges by 20% and impose a health insurance levy.

The levy is being rolled out to keep down the cost of health insurance for older people.

But Quinn claimed the Government was more interested in protecting the dominant position of Vhi than providing competition for customers.

“In essence these new measures represent a stealth tax on health insurance consumers,” said Colin Morgan, Chief Executive of Quinn Insurance.

The company said it had intended to hike prices by an average of 8% next year but the Government measures forced them to double this figure.

Under the new levy, health insurers will have to pay €160 for each adult and €53 for each child on their books.

Mr Morgan said Vhi competitors will now be forced to pay over €40m extra every year.

“The measures themselves are fundamentally flawed, as the €160 levy is due per member, irrespective of the level of cover a member has,” he said.

“This means that less well-off people on lower plans will be subsidising those better off who can afford premium plans.”

Vhi claimed it will not be passing the cost of the levy on to its customers.