Health insurance - Look behind price hikes

The two main health insurance companies VHI and Quinn Healthcare have announced that substantial price increases will be introduced in the new year.

VHI premiums will go up by 23% and Quinn Healthcare by an average of 16%. The latter blames the increase on the new health insurance levy of 8%. It was virtually inevitable that the companies would pass on the levy to customers, as the Irish Examiner predicted at the time.

Hibernian Healthcare has announced that it has no plans to increase its prices. This will hopefully encourage competition in the market place.

With the increase in prices, older people may feel compelled to give up their health insurance and rely, instead, on their medical cards. Some may possibly feel the Government took such a beating over its recent assault on the medical cards that it will be reluctant to go down that route again in a hurry.

The European Competition Commissioner Nellie Kroes came out strongly yesterday against large pharmaceutical companies for frustrating the introduction of lower cost generic drugs. She accused those companies of doing this by using the twin tactics of legal action and patent clustering around certain medicines.

In one instance a single medicine had 1,300 different patents. This tactic is used to frustrate the producers of a generic alternative by taking them to court. Such cases take an average of three years to resolve. During that time, the drug company keeps the generic alternatives out of the market. But companies have lost in “a clear majority” of cases in which they tried to block a generic alternative. This legalistic manipulation is contributing to high health cost and higher medical insurance.