Health insurance to become 'unaffordable' for many policy holders 

VHI has announced that it is increasing the cost of its plans by an average of 7% from the start of March. Picture: Eamonn Farrell/RollingNews.ie

Health insurance is set to become "unaffordable" for many families and elderly policy holders in a matter of weeks in the face of a third hike in prices in the space of just one year.

VHI has announced that it is increasing the cost of its plans by an average of 7% from the start of March. But added to the two previous hikes by the company in the last year, the actual increase could see hikes of up to €1,400 for an elderly couple and €500 for a family.

The insurer said the increase is necessary to "meet the healthcare needs of members" after claims volumes rose by more than 20% in 2023 due "mainly to covid-related issues".

It also said inflation had a significant impact on the cost of delivering healthcare.

"We are taking the difficult steps required to address this matter," said the company's managing director Aaron Keogh. "We are conscious of the financial pressures facing many of our members and are committed to delivering value by giving them access to high quality healthcare at the lowest possible prices.” 

However, Dermot Goode of Lockton, parent company to Totalhealthcover.ie, said: “This announcement from VHI will be concerning for all members on two fronts; firstly, their rates are increasing significantly for the second time in five months; secondly, they are cutting back on many out-patient benefits which will impact members on their corporate plans."

He pointed out that the latest 7% average increase comes following a similar increase across most of the company's plans from October 1 2023 and another in March 2023.

"All insurers are blaming these ongoing increases on the rising cost of claims but it goes without saying that consumers will not be able to absorb these soaring costs," he said.

The VHI hike, which comes as figures from the Central Statistics Office show health insurance inflation rose by more than 10% in the last 12 months, follows other hikes across the industry.

Irish Life increased its prices three times in 2023, with the latest hike in November coming into effect on January 1. That increase saw most Irish Life plans rise by 10%-15% on 2022, costing families anywhere from €150 to €600 extra for cover. 

Laya Healthcare also raised prices last year, which last October added an estimated €300 to family plans, with the insurer blaming private hospital costs.

Mr Goode says the latest VHI rate hike will add €105 per adult for those insured on the Enhanced Care 350 scheme or between €230 and €315 per adult for those insured on the Health Plus Extra and Premium Care schemes.

"The cumulative increase on these three plans from March 2023 is €184 on Enhanced Care 350; €449 on Health Plus Extra; and €693 on the Premium Care scheme. Members need to be wary of the average figures used by health insurers as the cumulative increase in these three examples ranges from 15% to 19%."

Mr Goode pointed out that for a retired couple on dated plans such as Health Plus Extra (old Plan B Options), the increase since March 2023 will cost them just under €900.

"For the same couple insured on the gold-plated Premium Care scheme, they will have to find an additional €1,386 if they want to remain on the same plan," he said.

"A typical family of two adults and two children will also be seriously impacted by these increases. For those families insured on the likes of One Plus Plan or Enhanced Care 350, the total increase since March 2023 will be €504 (16%) & €440 (19%) respectively. The popular Company Plan Plus Level 1.3 corporate plan will increase by €586 or 18%."

Mr Goode the "massive" increases will simply be unaffordable for many members.

"We are advising all those renewing on or after March 1 to urgently review their options with VHI and switch to an alternative insurer if necessary.

"The best advice is to decide on your budget for your family health cover and then challenge the insurers to find you similar cover that fits this. Auto-renewing without checking our alternative options should be avoided at all costs."

A Health Insurance Authority spokesperson said: "Due to medical inflation and an increase in claims volume since the COVID-19 pandemic, insurers have affected a number of price increases."