Vhi announcement a sign of 'bad old days' of rising health insurance, says expert

We are back to the “bad old days” of multiple small increases in health insurance premiums, an expert has warned.

Dermot Goode of TotalHealthCover.ie was commenting on Vhi's announcement that it will increase its prices by an average of 2% from March 1.

“While the Vhi is saying there will be an average price increase of 2%, some policies could increase even further,” he warned.

Mr Goode believes families will have to dig deep to pay between €75 and €150 extra for cover. However, he has yet to get the full plan breakdown.

Vhi, the largest health insurance insurer in the State, says increasing claims costs are the main drivers of the price hike.

Declan Moran, Vhi director of marketing and business development, said the company tried to keep the price increase as low as possible without compromising on cover.

However, last year there was a “significant increase” in claims paid on behalf of its customers.

Mr Moran said there has been an increase in activity in private hospitals. Primary care claims also increased because the customers are now using their day-to-day benefits more often.

"The price increase is necessary to cover the costs of providing quality healthcare to customers in 2020 and beyond, including access to new technologies, new drugs and new procedures," he said.

Mr Goode said it is the second time in recent months that Vhi has announced a price increase. The last increase was an average of 6% in August last year but some plans went up by 10%.

And for anybody due to renew their health insurance cover from March onwards, there are two price increases potentially coming their way.

Mr Goode also warned that the Vhi is not the only insurance company that is increasing its rates. “We are back to the bad old days of multiple small increases,” he said.

“This won't be the last of the price increases. This is just the latest one.

We are expecting more, unfortunately. There is no positive slant that can be put on this.

People should be expecting potential price increases ranging from 5% to 10% when they receive their renewal notice. “So really the message is shop around,” he said.

“The claims that are coming through, particularly from private hospitals, seem to be way ahead of budget,” said Mr Goode. Because more people are going to private hospitals to be treated there is a corresponding knock-on effect on claims.

Mr Goode said the latest price increase from the Vhi should serve as a wake-up call to everybody who is on older plans; who have never reviewed their cover; or shopped around.

“There are so many options out there. Some people are flabbergasted when they do their review and they see what they can save,” he said.

“All we would say to people is shop around for health cover just as you would for car or home insurance. Don't just take this on the chin because if you do you are simply going to throw good money away."

People on the same plan for three years or more, or paying more than €1,800 per adult, and those who do not have a small policy excess are at risk of overpaying and a review of their cover is "definitely recommended".