Monday 25 September 2017

Health insurance set to rise for families by €800 a year

Charlie Weston Personal Finance Editor

A NEW hike in premiums is set to spark a health cover flight as 100,000 people could be forced out of the private health insurance market.

Families will be hit for an extra €800 a year following the latest private health insurance hike.

This move sparked fears last night that thousands more will abandon private healthcare for the the overstretched public system.

Quinn Healthcare will add a 6pc policy price rise to those that have already kicked in this month as health insurance increasingly becomes a luxury.

And further increases are expected from all three insurers -- VHI, Aviva and Quinn Healthcare -- this year, because of Budget measures to pass on more hospital costs to health cover providers.

The succession of price rises has prompted fears that up to 100,000 will ditch healthcare cover this year.

Already around 6,000 are being forced to dump their private medical insurance every month as they cannot meet soaring costs.

Quinn yesterday announced the 6pc rise, which comes into force in March. It follows an increase of up to 25pc earlier this month and two previous rises last year.

Aviva is poised to increase the price of its policies by 15pc from next month -- after two rises last year.

And VHI will announce a new round of increases within weeks, after two increases which pushed up the price of some policies by 48pc last year.

Experts expect the VHI to admit that policies will rise at least 15pc this year.

Quinn Healthcare blamed yesterday's hike on the 40pc increase in the levy imposed by the Government on private healthcare policies, a move first revealed this month in the Irish Independent.

The insurer said the extent of the rise in the health levy was not anticipated and it was not in a position to fully absorb such large increases.

Health Minister James Reilly insisted that the large rise in the levy should not mean higher premiums for consumers.

But Quinn Healthcare managing director Donal Clancy said the higher levy would cost his company €20m in a year.

He admitted more people would have no choice but to give up health cover.

"We fear that these levy hikes will mean that, undoubtedly, more people who can afford it least will be forced into a public health system which is already buckling under intense pressure."

Even more rises are on the way due to Government plans to charge a health insurer every time a person with private cover uses A&E in a public hospital. Legislation will be introduced later this year to bring in this new system which will cost insurers around €143m.

Experts estimate this change will send prices shooting up again by at least 15pc, with the VHI recently warning that it may have to impose 50pc increases because of this new rule.

A total of 2.17 million people now have private health insurance -- down 123,000 since the start of the recession.

Health insurance expert Dermot Goode of healthinsurancesavings.ie said: "This latest Quinn increase adds to the probability of 100,000 consumers allowing their health insurance to lapse in 2012, forcing them to rely on the already creaking public system."

The latest Quinn rise will impact at the next renewal of policies. It follows increases which came at the start of last year and last April.

This means that the cost of a typical policy for two adults and two children on Essential Plus Excess will jump to €2,959.

This is up from €2,151 in January last year, a rise of 38pc. This means the cost for health cover will jump by €808 in little over a year, calculations confirmed by Quinn Insurance show. And an average family would need to devote €5,000 before tax earnings just to cover their healthcare costs under this plan.

Irish Independent

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