Tuesday 21 October 2014

Cheaper options can help you keep health insurance

Published 24/03/2013 | 05:00

ABOUT 200,000 of us have been forced to cancel our private health insurance over the last four years – thanks to the recession, the last six austerity budgets and massive private health insurance price hikes.

Now, on top of all that, the Government is hitting those of us who can still manage to pay private health insurance with an even higher health insurance levy.

When it was first introduced about four years ago, the health insurance levy cost €160 per adult and €53 per child. By the end of this month, that levy will have jumped to €350 per adult and €120 per child.

It's no surprise then that a survey published last week found that one-third of young families plan to cancel their private health insurance this year.

If you're struggling to make ends meet but are reluctant to cut out your private health insurance, moving to a cheaper plan could be an option.

The Sunday Independent lined up private health insurance expert Aongus Loughlin of Towers Watson to recommend plans which might just allow you to hold onto your insurance in these tough times. Loughlin's quotes do not include group or online discounts which could reduce the cost of your cover – if you qualify for them.

YOUNG FREE & SINGLE

You're a 24-year-old single male who does not have any kids. You rarely to go the doctor. You're currently paying about €960 a year for private health insurance – but you've taken a pay cut, so can't afford to pay this anymore. You want a cheaper plan which, at the very least, offers good cover for treatment in a public hospital.

If you switch to Laya Healthcare's Essential First plan, you could almost halve the cost of your cover. This plan, which costs €504.40 is one of the cheapest plans around, according to Loughlin. It provides full cover for a semi-private room in a public hospital. If you pay monthly, you must also pay a 3 per cent administration charge, which brings the cost of your policy to €519.53.

VHI Healthcare's One Plan Starter, which costs €524.80, could also be worth considering, according to Loughlin. This plan provides full cover for a semi-private room in public hospitals.

Another plan tipped by Loughlin is Glo Health's Basic plan. It costs €556.50 per adult until March 31.

YOUNG FAMILY

You're a couple in your late 30's with two children under the age of three – a one-year-old toddler and a terrible three-year-old. You'd currently be paying about €3,500 a year for private health insurance.

Although you both work, the cutbacks and tax hikes of the last few years have made it hard for you to make ends meet – so unless you get a cheaper private health insurance plan, you'll have to give it up. If you can hold onto your insurance, your main priority is cover for a semi-private hospital room.

You could save €1,609 if you opt for Glo Health's Better Plan. This plan, the cheapest recommended by Loughlin for the family, costs €842.50 per adult and €206.54 per child over the age of three.

As children under the age of three are free under Glo's Better Plan, the total cost of your plan comes to €1,891.50 for the year.

Another plan that is recommended by Loughlin is Laya's Total Health Choice plan, which costs €2,295 for the family – or €2,364 if paying monthly.

One of the cheapest VHI plans is its PMI 2612 corporate plan, which costs €2,533 this year for two adults and two children. The cheapest Aviva plan recommended by Loughlin is Health Plan 05, which costs €2,561.20 for the family.

"These plans provide cover for private rooms in public hospitals, as well as cover for a semi-private room in a private hospital," said Loughlin.

The excess on these plans (the first part of the claim which you must pay yourself) for treatment in a private hospital varies, depending on the insurer you're with.

If you're likely to require cover for hip replacements or eye surgery operations, check the excess on a plan before you move as it can be as high as €2,000 in some cases, warned Loughlin.

MIDDLE-AGED FAMILY

You're a couple in your 50s with three children – aged 12, 15 and 19. You're paying almost €4,000 a year for private health insurance.

As your eldest has just started college, you've recently had to cough up €2,500 for college registration fees – so you can't afford to pay €4,000 a year for insurance anymore.

However you'd like to hold onto a plan that covers your family for a semi-private room in hospital.

You could save between €983 and €1,484 this year by opting for one of the plans recommended by Loughlin. At a total cost of €2,516.50, the cheapest plan tipped by Loughlin is Glo Health's Better Plan. The second cheapest is Laya's Total Health Choice plan, which costs €2,569 a year – or €2,646 if you pay monthly.

If the family go for VHI or Aviva plans recommended by Loughlin, they'll pay a few hundred euro more than they will at Glo or Laya – VHI's PMI 2612 costs €2,866.70 while Aviva's Health Plan 05 costs €3,017.

All these plans include cover for a semi-private room in a private hospital. Again, it's important to check out any excesses that apply before choosing one of these plans.

ELDERLY COUPLE

You're a couple in your 60s whose kids have all flown the nest. At this stage in your lives, you want a plan that offers good hospital care. However, you're paying almost €8,000 a year for private health insurance and as one of you has just recently retired, you can't afford to pay that anymore.

You could easily halve the cost of your private health insurance by choosing one of the plans tipped by Loughlin.

The cheapest plan recommended by Loughlin is Laya's Healthcare Healthwise Plus (No Excess), which costs the couple €1,770 a year – or €1,823 if paying monthly.

Other plans recommended by Loughlin are Aviva's Level 2 Complete Health plan, which costs the couple €3,527.20; Glo Health's Ultra Plan, which costs €3,596; and VHI's Health Plus Extra (Plan B Options), which costs €3,674. These plans offer semi-private care in a private hospital.

"The plans also provide cover for certain cardiac procedures if carried out in the Mater Private or Blackrock Clinics," said Loughlin.

CASH PLANS

If your financial circumstances mean you have no option but to go without private health insurance, a health cash plan could be an option. These plans cover day-to-day medical costs, such as GP, dental and consultant fees – rather than hospital care.

The cost of HSF Health Plan for example – a cash plan offered by the Hospital Saturday Fund – ranges from €114 to €972 a year.

"While HSF Health Plan does not cover a stay in a private hospital, it pays grants of up to €120 per night for up to 40 nights stay in a public or private hospital," said a spokeswoman for HSF.

BEFORE YOU SWITCH

If you're considering switching to another insurer, it is usually best to wait until your renewal date. Otherwise, you could be hit with penalties and other charges which could easily wipe out any savings you expect to make.

Most insurers treat your health insurance as a 12-month contract. If you cancel mid-way through that contract and you're with Aviva, VHI and Glo Health, you will usually have to pay the balance of any health insurance levy your insurer has paid on your behalf – which you have not already paid for through premiums.

VHI will also hit you with an administration fee of €50 per policy, while Aviva's administration fee is €25 per policy.

"A VHI healthcare policy is a 12-month contract which can only be changed at a customer's renewal date or in clearly defined circumstances," said a spokeswoman for VHI. "If a customer has incurred a claim since renewing, they will be liable to pay the outstanding premium due to us until their next renewal date."

A spokeswoman for Laya Healthcare said that customers who cancel their insurance mid-year "are not eligible for a refund of the remainder of the 12-month policy, regardless of whether a claim has been paid out on their behalf in that membership year or not".

Irish Independent

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