Health insurers respond to levy increase

Quinn Healthcare and Aviva are hitting out at the Government's decision to increase the levy on health insurance policies by almost 40%.

The levy - which was introduced in 2009 to compensate insurers with older customers - will rise to €285 for adults and €95 for under 18s, from €205 and €66 in 2011.

This increase comes in addition to amendments to the rate of Age Related Tax Relief (ARTR).

"Such dramatic changes to the health levy and rate of ARTR were not anticipated and, as usual, it is families and those on the lowest level of cover that will be most affected," said Quinn Healthcare Managing Director Dónal Clancy.

"Quinn Healthcare works hard to ensure that costs are kept as low as possible - however, such significant increases are difficult to absorb."

Aviva says it will absorb the rate hike for now - but the VHI says it will not be passing on the charge and welcomed the move, saying it is a step in the right direction towards the implementation of a proper risk equalisation scheme.

“In order to have a truly competitive marketplace you need to regulate the market in such a way that it is equally attractive to insure an 80-year-old as it is to ensure a 30-year-old," said VHI Chief Executive Declan Moran.

"As it stands new entrants to the market basically cherry pick younger customers leading to market segmentation and ultimately older customers paying more.“