Private health industry is crying out for business
THE health insurance industry appears to have suddenly adopted the Domino's Pizza business model. Or maybe Ben & Jerry's. Good templates both, but the pay-as-you-go 'toppings' approach isn't taken lightly when ordering a treat, so it certainly shouldn't be when buying an important and complex product like health insurance.
Nevertheless, with universal health insurance looming (admittedly still a mere white paper twinkle in James Reilly's eye), insurers, already dismayed at seeing customers leaving in droves, have had to reinvent the way they do business – recalibrating products in an effort to hold on to customers.
Buyer beware, however. The reason some private health insurance products are more affordable than others is that cutbacks have usually been made – either through fewer benefits, higher excesses (the first part of a claim you pay yourself) or additional co-payments (where you share the cost of a particular procedure with your insurer). Another way that insurers are bringing down the cost of some products is by reducing the number of hospitals where you are covered for treatment.
Dermot Goode of HealthInsuranceSavings.ie says insurers' responses can be summed up as, "You take higher risks, we'll charge less". He adds there's nothing at all wrong with yellow-pack insurance, as long as customers are aware of what they're getting ... and missing out on.
"There is a market there, it's basic but fine for those who have left the market and are re-joining, or are young and healthy," said Mr Goode. VHI started the trend with their One Plan 500, extremely popular and offering cover for less than €700 a year – their One Plan Starter is now just €547. Laya's basic offering is €463.29; Aviva's €548.60 and Glo's Net One costs €514. For the newbie surfing the market, it doesn't sound that expensive at all.
But what you have to delve deep for is the amount of each claim you pay (known as the 'excess') and exactly what hospitals are covered. There's a real city/rural divide because unless you have a range of options where you live, you might find that the facility nearest you isn't on the list.
Yellow-pack insurance, for example, might cover you for treatment in the Galway Clinic rather than the Bon Secours Hospital in Dublin. "Clane Hospital may be down the road from you in Kildare, but you could be sent to the Beacon," said Mr Goode.
Indeed, people may be surprised to find that many public hospitals are not covered either. Glo Health doesn't cover any of the five public orthopaedic hospitals for instance, including Cappagh, on its Net One plan, nor does Aviva on its 'First Focus' product. The latter also only covers 33 of the 58 public hospitals in the country, excluding, for example, James Connolly in Blanchardstown and Our Lady's in Navan.
As a citizen, you are, of course, entitled to public care but a private or semi-private room is by no means a guarantee just because you have insurance. However, the fact that you do grants the admitting hospital €813 per night versus the €75 they would get from you as a public patient, irrespective of whether or not you get a room. Why should you care? Well, if everyone with private cover agrees to being treated as a private patient when asked, premiums ultimately go up for all. "You don't have to sign the form," says Goode, "you're signing away your right to be treated as a public patient and there's no guarantee of a bed. Stay "private" for elective referrals – you'll skip the queue; you don't have to use it just because you have it. If you want a private service, go to a private and you'll get what you're paying for."
When it comes to private hospitals, remember first and foremost they are a business and as such, are prepared to do deals. They'd much prefer to get 50pc of the fee for an in-patient if that's what their policy provides, than 100pc of nothing and have the customer go elsewhere. One man of this writer's acquaintance received no bill at all after a prolonged stay in Blackrock Clinic, despite his VHI policy meeting just 45pc of the costs. "There are plenty of case by case arrangements being made," confirms Mr Goode. "Blackrock, Mater and Hermitage are all open to it, but do ask. Go to your GP, and make sure you're referred properly, get the 'procedure code' and don't be afraid to phone up and do a deal the same way you might with a new car. Many private hospitals are crying out for business."
Co-payments are an insidious creep-in on many plans, especially for orthopaedic surgeries. Making sure the customer pays €2,000 towards their hip replacement is a sure way of keeping premiums lower, but many are shocked to get the bill afterwards. The VHI has 22 procedures with mandatory co-payments, many specific to older people; Glo has 10 while Laya's list hasn't been published yet since they started in May.
Excess is the new fudge when it comes to opacity on health insurance products. Some plans charge it by the day, others per claim and others just once a year. Some charge an excess per family, with others it's one for everyone in the audience (or on the policy, at least). Confused? You should be.
It is the last thing you want to be thinking about when you're stuck in A&E wondering whether you can afford to be admitted. So, consider carefully, in advance, how much you have to pay before they do:
For example, Laya has an annual excess of between €300 an €440 on its 'Essential' family plans, irrespective of the number of claims in a year. Glo's 'Better' plan only has a €50 excess on day cases in a private hospital but the excess for an overnight stay in a private hospital is €100 per claim for a semi-private room – and €200 per night for a private room. Aviva's Level 2 Health Excess has an excess of €125 per claim if you stay in a semi-private room. All policies and providers have different excesses for in-patient and out-patient; individual and family policies; per claim or per year. Make it your first question.
Sunday Indo Business