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Thursday 18 September 2014

€360 blow for families as health cover to rise again

Charlie Weston Personal Finance Editor

Published 02/05/2013 | 05:00

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HEALTH insurance premiums will rise by at least €360 per family in the latest crippling blow to household budgets.

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This is because the Government has revealed that legislation will be enacted in July to charge all those with health insurance for using public hospitals.

Experts say customers will now be hit with a knock-on hike in premiums of at least 15pc – on top of multiple increases already in the past six months from Laya, GloHealth, VHI and Aviva.

It means the average premium for a family of two adults and two children has now doubled in the past three years to around €2,500 a year.

The latest increase could come in within weeks to counter the higher costs for insurers – leaving families who renew from this autumn being hit with three hikes in a single year.

The move to charge anyone with private health insurance for treatment in a public hospital was described by insurers as a "gamechanger" that risks destroying the health-insurance market.

A spokeswoman for the Department of Health confirmed to this newspaper that legislation to effect the change will be enacted by July 1.

The Government expects to raise €60m this year from the measure and €120m in a full year.

The move was signalled in last year's Budget, but it was not known how much of that extra cost would be passed on to customers – nor how quickly it would come into effect.

The department's spokeswoman said that at the moment half of private patients who stay overnight in public hospitals do not pay maintenance charges, which are up to €1,000 a night. A nightly charge of €75 applies for a public hospital.

But insurers said the move to impose the €1,000 charge would mean that even those who were being treated publicly would find that their insurer was charged for the stay in hospital.

Dermot Goode, of Healthinsurancesavings.ie, said this would mean a minimum of 15pc hike in premiums this year. This is on top of two increases already in the past six months from Laya (previously Quinn) and GloHealth, VHI and Aviva. The rises have been between 18pc and 20pc, he said.

The average premium for a family of two adults and two children has now doubled in the past three years to around €2,500 year. Around two million people have health insurance but they are reeling from double-digit increases this year and average rises of 20pc last year.

Mr Goode said a family on a more expensive plan costing €3,400 a year would be facing a rise in premiums of €500.

Aviva Health chairman Brian Dunne told the Irish Independent: "Any move to redesignate bed charges will inevitably and substantially drive up premiums because insurers simply cannot bear the cost and remain in business. It could well have substantial implications for the sustainability of the market."

VHI said: "If this goes ahead, it could mean that those with private health insurance are effectively being asked to pay on the double for a bed in a public ward – that is, through general taxation and their private health insurance."

And Catherine Whelan, the chief executive of the Independent Hospitals Association, which represents 21 private hospitals, said the move would cause thousands more to give up medical insurance.

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She said 200,000 people had given up health insurance in the past two years, adding that there was a huge risk that private hospitals would be forced to close if there were fewer insured people in the market.

However, Health Minister James Reilly's spokeswoman called on insurers to negate the impact of the extra charge by cutting their own costs.

She said: "The minister is determined to address costs in the sector and has made it clear to the health insurers that significant savings can be made."

Irish Independent

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