Saturday 10 December 2016

Another price hike will see 700,000 ditch health cover

Charlie Weston Personal Finance Editor

Published 09/01/2012 | 05:00

Picture posed. Thinkstock
Picture posed. Thinkstock

CASH-strapped families are at breaking point with the cost of health insurance -- and one in three is now warning that they will cancel private medical cover if there is another price hike.

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That means more than 700,000 people could cancel their private health insurance, increasing the pressure on the public system.

A new survey has found that 10pc of customers will ditch their cover this year due to pressure on household budgets.

And 31pc of those surveyed say they will cancel their subscriptions if there are any further price rises.

Despite Government promises to cut the cost of health insurance, premiums are expected to increase further.

A total of 2.17 million people currently have private health insurance -- a number that has fallen by 123,000 since the recession started.

The survey was carried out for the Irish League of Credit Unions and completed before Health Minister James Reilly increased the levy on insurance policies by 40pc.

It means some of those surveyed may already have decided to axe their policy.

This will put further pressure on an increasingly cash-strapped system.

The iReach survey of 1,000 adults found the rising cost of private health insurance was one of the biggest issues for households -- but an increasing number of consumers are now struggling to pay their bills on time.

A total of 55pc of those surveyed are struggling -- a marked increase on the 42pc who said they had problems paying on time just three months ago.

But Dr Reilly insists his policies will bring down the cost of health insurance.

Responding to the survey last night, Dr Reilly's spokesman pointed to the setting up of a new health insurance forum to work with the companies in finding ways to reduce costs.

"Minister Reilly is determined to drive down the costs of health insurance," the spokesman said.

The latest increase in the levy was to subsidise older subscribers.

Already an average of 6,000 people a month are giving up health insurance with 53,000 giving up their cover in the first nine months of last year.

This follows a succession of price hikes. Quinn has pushed through rises of between 7pc and 25pc from the start of this month while Aviva policies will get 15pc more expensive from next month, having gone up twice last year.

And the VHI, which had two price rises last year, is expected to raise its prices for consumer plans in the next few weeks.

Last week the Irish Independent revealed the levy imposed on all healthcare policies by the Government has gone up by 40pc to €285 for an adult.

Quinn Healthcare said it would probably have to pass on the cost of the levy, while Aviva said it would absorb it for now but would need to review its prices again soon.

Last night, League of Credit Unions chief executive Kieron Brennan said families are struggling because incomes have shrunk and are continuing to shrink.

Irish Independent

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