Families face new €300 hike in health insurance cover
FAMILIES will have to pay an extra €300 a year for health insurance in a devastating wave of post-Christmas price hikes.
The Irish Independent has learned that the four insurers -- VHI, Laya, Aviva and Glo -- are set to hike their premiums by between 10pc and 15pc again from the start of the New Year.
This follows a succession of price hikes that have seen the cost of health insurance double since 2009.
Earlier this week, VHI said it was pushing up premiums by 3pc next month.
This is the fourth price rise in two years and means the cost for the average family will jump by around €100.
Now it has emerged that VHI, Laya, Aviva and Glo Health are lining up rises of between 10pc and 15pc from the start of next year.
This means the average plan for a family with two children will rise to €2,300 -- up by €300.
The rises are to cover an increase in healthcare claims, spiralling health inflation to cover the cost of new drugs and procedures, and the expected rise in the cost of the levy on private healthcare of up to €200 per family.
Dermot Goode of www.healthinsurancesavings.ie said the higher premiums would be announced in December and take effect for those renewing from January.
"The average family can expect rises in premiums of between 10pc and 15pc. But it could be higher.
"We may actually be lucky if we get away with 15pc," he said.
The cost of health insurance has doubled since 2009.
The VHI alone has had five hikes since January 2009, putting huge pressure on family budgets.
Some 2.1 million people have private medical insurance, but around 6,000 people a month are being forced to drop their cover.
Most of those opting out are young families -- the ones least likely to use health cover. This is proving to be a huge problem for insurers.
The VHI said it was putting up its premiums now because it needed to price policies "to ensure that we can continue to cover the healthcare needs of our customers".
It blamed the latest price rise on the fact that people were living longer with long-term illnesses.
The cost of claims for private hospitals has gone down but public hospital costs continue to rise, according to the insurer.
The increase will take effect from November 22 next. VHI is the largest health insurer and has 1.3 million customers.
Last March it increased prices by between 6pc and 12.5pc, on top of a 1.9pc rise last November.
Other insurers have also increased their prices this year.
Aviva premiums rose by up to 7pc for policy renewals from last week, the fifth increase in less than two years. Laya Healthcare, formerly Quinn Healthcare, has had two price rises this year.
The insurance companies met Department of Health officials last Friday over the department's plans to revamp risk-equalisation rules.
No information has been provided to insurers on the likely hikes in the levy being used to fund risk equalisation, a process to compensate insurers with older, more expensive, customers.
But most insurers expect it will have the effect of adding 10pc to the cost of private medical cover.
There is also likely to be a rise in the costs for health insurers of using private beds in public hospitals.
Mr Goode said that medical inflation was running at around 8.5pc, due to the expense of new drugs, new technologies and the cost of covering new hospitals.
He said that insurers were now adopting the approach of announcing a succession of smaller rises, of between 3pc and 7pc.
But he said this would change at the end of the year as insurers push through much larger increases to allow for higher levies as part of risk equalisation and higher charges for private beds in public hospitals.
Risk equalisation is a way of ensuring everyone pays the same for health insurance no matter their age and irrespective of the state of their health.
Insurers with the majority of older people get compensated through a levy on all policies for having more aged clients, who make more claims. Most of the new levy will go to the VHI.
Health insurers had no official comment yesterday when asked about plans for a new round of price hikes, but privately they conceded that large rises were inevitable.
New rules on risk equalisation are expected to increase health insurance premiums alone by as much as €200 for a typical family.
The regulations are being brought in by the Government to ensure older people don't have to pay more for health coverage.