Thursday 25 December 2014

Aviva hits families with €172 health hike

Charlie Weston Personal Finance Editor

Published 27/02/2013 | 04:00

The cost of health insurance has doubled in the past two years
Aviva will increase its premiums

A FOURTH health insurer is to increase its premiums. Aviva said its premiums would rise by up to 6.4pc from March 31, in a move that will cost families up to €172 extra over a year.

It is the latest in a series of insurance-price hikes to hit families over recent weeks.

Laya has imposed two hikes this year. Last week the company, formerly Quinn Healthcare, imposed rises of up to 16pc, having already hiked some premiums by up to 14pc in January.

VHI also raised its premiums by up to 8.5pc this year, while new player GloHealth pushed up premiums by up to 8pc.

The cost of Aviva policies will jump by an average of 4pc by the end of next month.

The timing of the rise means that anyone renewing their cover with Aviva after the end of March is likely to be hit with higher costs.

Aviva boss Alison Burns blamed the Government's decision to raise the cost of the levy imposed on every health policy by €65 a year for adults.

The new levy, of €350 per adult, comes into effect on March 31. The levy ends up compensating the VHI for having a majority of older, more expensive customers. It ensures that everyone pays the same premium for the same level of cover, irrespective of their age.

Ms Burns added that there was a massive jump in the number of claims Aviva was forced to pay out on last year.

"We are acutely aware that many customers are struggling to meet the cost of their health insurance. That is why we have minimised increases on all plans and there are no increases on many of our entry-level plans."

She added that there would be no premium increase on 27 of the company's plans.

Renew

The hikes will see the annual cost of Aviva's Level 2 plan go from €2,700 for a family of two adults and two children to €2,871 a year.

Industry expert Dermot Goode of Healthinsurancesavings.ie said both Aviva and Laya only introduced one-year contracts last year.

This means people who are insured with these companies and are due to renew after April or May now have an opportunity to break out of their contracts early and get a cheaper policy.

He said the succession of premium rises were forcing families in particular to ditch their health cover.

Some 6,000 people a month are leaving the health-insurance market.

Irish Independent

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