Tuesday 17 October 2017

Battle hots up, but be wary of new low-cost health schemes

HEALTH INSURANCE: There will be more offers closer to May
HEALTH INSURANCE: There will be more offers closer to May
Charlie Weston

Charlie Weston

THE battle has begun to sign up thousands of people to health insurance before a new regime of penalties comes in next May.

Up to 60,000 people who do not currently have cover are the target for the four insurers who see a bonanza on the horizon.

But those thinking of taking out cover for the first time should be wary and bide their time before opting for some of the new cut-price plans being launched to entice the uninsured.

Last week, Laya became the second insurer in days to launch new low-cost plans.

Its move came after the VHI said it was introducing a €449-a-year scheme.

The second-largest health insurer, Laya, is to bring out a €430 basic plan.

Thousands of people are expected to join the market before May 1, when new penalties apply to those over the age of 34 taking out cover for the first time.

Known as lifetime community rating, this is an attempt by the Government to encourage people to take out health insurance earlier in life and to control premium inflation across the health insurance market.

Under community rating everyone pays the same price for a policy with similar benefits, irrespective of how old or healthy they are.

Lifetime community rating will penalise those who leave it until later in life to take out cover.

The penalty will be 2pc on the policy price for every year the person is over the age of 34.

This means a 50-year-old taking out cover for the first time will be hit with a 32pc charge on top of the premium price.

In a bid to capture some of those taking out health insurance for the first time, VHI and Laya have already launched cheap new plans.

Aviva and GloHealth are preparing to launch similar schemes.

Most of these new plans are expected to be taken up by younger people. But caution is required.

Laya is introducing Assure Vitality at a cost of €430 a year. The plan will be launched on March 1, and covers treatment in all public hospitals.

But there is no cover for private hospitals and clinics. The cover in public hospitals is for semi-private rooms, and a shortfall may apply.

State-owned VHI Healthcare said it was to launch two low-cost plans in March.

VHI Start Plan and Start Plan 250 will cost from €449 per adult a year.

The plans are cheap because cover is excluded from all private hospitals, with some larger public hospitals also not covered.

Those thinking of buying these new plans should bide their time and wait until nearer May when the market for new cut-price plans has settled down.

Also, be aware that these entry-level plans have limited benefits. On the other hand, just one night in a semi-private room, at a cost of €900 a night, will mean one of these plans will has paid for itself.

Twitter: @CWeston_Indo

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