Families hit as VHI pushes up prices yet again
Published 29/01/2014 | 02:30
FAMILIES will be forced to pay more for health insurance with the largest player in the market set to push up the cost of the majority of its plans.
VHI Healthcare is to announce today that its plans are to go up by an average of 3pc from March 1. Some plans will go up by 6pc.
It comes a week after it was revealed that the VHI's popular Teachers and Nurses plans will go up by 5pc with effect from Saturday.
Now the state-owned VHI is to push up the cost of the majority of its consumer plans from March, the Irish Independent has learned.
The highest premium rises will be on the VHI's Health Plus Access, which used to be called Plan B. It is going up by 6pc. The same increase will apply to Health Plus Extra, which used to be called Plan B Options.
The popular One Plans are going up by 2pc. Many people who had the old Plan B switched to these when VHI imposed rises of up to 45pc in 2011.
The March price rise will mean the One Plan policy will now cost an extra €50 a year at €2,527 for two adults and two children.
The combination of the higher price from March, and changes in the last Budget to the tax treatment of premiums, means the cost of this plan for a family will have risen by €225 from January last year.
A similar-sized family will face an additional €1,000 in premiums for Health Plus Access – the old Plan B. From March the plan will cost a family €4,378 due to the price rise and the reduction in tax reliefs.
It is understood that the VHI will argue that the price rises are necessary because Health Minister James Reilly has increased the cost for health insurers of using public hospitals.
The Government is set to extract €130m from the four insurers this year for the use of public beds.
But the VHI will maintain that its price rises are the lowest in the market. Last year it raised its premiums by 6pc.
However, no price rises are to be announced for corporate plans which are marketed to companies but can be bought by families and individuals.
Health insurance expert Dermot Goode of Healthinsurancesavings.ie said it was not surprising that insurers were increasing their rates again given the numbers that continued to exit the market.
“Whilst some of the low-cost, mid-level plans will increase by €50 for a family, some of the old reliables will be increasing by approximately €250 for a family of two adults and two children,” Mr Goode said.
“For those still on these plans, they need to act quickly to grab some of the ‘deals’ that are on offer across the market.”
Some 6,000 people a month are ditching health insurance.
It is the first time since last year that the VHI hiked its premiums. Both Aviva and GloHealth imposed rises of 5pc at the start of this month.
Mr Goode said he now expected more rises from Laya Healthcare.
VHI has a 55pc share of the health insurance market, but the older profile of its customers means that it pays out seven out of 10 of the health insurance claims.
Charlie Weston Personal Finance Editor
Irish IndependentFollow @Indobusiness