Charlie Weston: Central Bank must crack down on health insurers as costs spiral
There seems to be no end in sight to the relentless rise in the cost of health insurance. GloHealth is the latest to raise the cost of premiums, following a series of smaller rises announced earlier in the year from Vhi and Laya.
All told, the Vhi and Laya rises will mean it will be 10pc more expensive on average to renew on these policies, while GloHealth's premiums will be 6pc dearer on average from December.
The averages hide a multitude as the cost of some plans are going up by much more.
Irish Life Health has taken over both Glo and Aviva but even with consolidation in the health insurance market, prices keep rising.
Extra pressure on costs comes from the Department of Health's plan to push up the State levy imposed on all health plans by 10pc. Health Minister Simon Harris has called on insurers to resist pushing up the cost of premiums in response to the levy rise, but there is some hope of that. The likelihood is that insurers will pass on the cost to consumers.
The levy is imposed on health insurers to ensure no-one pays any more than anyone else for the same level of cover, irrespective of age and health status.
Health insurance premium rates are rising incessantly despite more than 100,000 new entrants to the market last year, as they opted to join and avoid penalties for entering the market later in life.
There are more than 300 different health plans out there from the three providers, making it difficult to compare and seek better value.
Just a quarter of people have ever switched their health insurer in the past, according to the Health Insurance Authority. The average time policyholders have been with their current provider is 14 years.
No wonder a survey carried out by Dermot Goode of Totalhealthcover.ie found that consumers are overpaying for their cover by an average of 19pc. This equates to over €700, with some overpaying by as much as €1,200 on like-for-like family plans. The review also found that older people fare worse due to a number of factors, chiefly a lack of knowledge of entitlements and inadequate communications from insurers.
What all of this points to is the need for strong regulatory intervention. The Central Bank should require health insurers to tell people at renewal time how much they paid last year, so they can see how much their plan went up by. Insurers should also be forced to outline their better-value options, including corporate plans.
The proliferation of plans, misplaced consumer loyalty to providers and never-ending price rises necessitate stiff regulatory intervention.
Sunday Indo Business