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Wednesday 27 August 2014

Now health insurers threaten hikes over charges for public beds

Charlie Weston Personal Finance Editor

Published 27/11/2013 | 22:50

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FAMILIES will see the cost of health insurance rise again unless the Government keeps its promise to cap new charges being imposed on insurers, the industry said.

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The premium rises may translate into an extra cost of €250 for the average family if Health Minister James Reilly does not uphold his commitment to limit the charges to €30m.

The latest threat of rises comes just weeks after the Budget saw changes to tax reliefs push up the cost of health cover.

Now Dr Reilly is bringing in new charges in January that will apply to anyone with health cover who uses a public hospital.

Health insurers will be charged up to €800 a night even if their customer only gets a public bed in a public hospital.

The four health insurers said that the way the charges are set to be structured will mean a massive hike in premiums.

They called on Dr Reilly to keep a promise he made in the summer to cap the new charges.

A spokesman for the minister said he was committed to ensuring no more than €30m was raised from the new charges.

In July, Dr Reilly promised to restrict new costs to be imposed on insurers for using public beds to €30m.

But the VHI, Laya, Aviva and GloHealth said that independent research they commissioned shows that the actual cost is more likely to end up being €130m.

A body representing the four insurers -- the Health Insurance Council -- said imposing an additional cost of €100m was unacceptable and would be passed on to customers.

Kevin Thompson of the Health Insurance Council said: "Current rates will raise an additional €130m for the HSE rather than the €30m announced by the minister in July 2013 and published in Budget 2014.

"That is an additional €100m over and above what was planned for and is completely unacceptable."

Mr Thompson said those with private medical cover will end up being charged for all beds in a public hospital -- whether they get a private room, semi-private room or a public bed.

This would amount to "double taxation" for no extra benefit.

LIMIT

He said the industry was calling on Mr Reilly to uphold the commitment he gave in July to limit the new charges to €30m.

The latest move comes on top of changes in last month's Budget that saw the tax relief on health policies get pared back. There is now a limit of just €200 on the tax relief applied to the gross cost of an adult's policy.

This has meant the cost of an adult's policy has shot up by €80 for the mid-range One Plus Plan from the VHI.

Now the industry is saying that moves to impose costs of up to €130m on health insurers will mean a family on the One Plus Plan will see the annual cost go up by 10pc.

This would amount to a hike of €250 in the annual cost of the cover for a family of two adults and two children on the One Plus Plan, Dermot Goode of HealthInsuranceSavings.ie said.

At the moment, if someone gets a public bed in a public hospital the most that is charged to the insurance company is €75 a night.

Dr Reilly's change from January will see the insurance company being charged €800 a night even if the patient, who has insurance, is in a public bed, Mr Goode said.

But the impact of the €800 a night fee for those with insurance using a public bed could be lessened if Mr Reilly keeps his promise, the Health Insurance Council said.

Irish Independent

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