Thursday 19 October 2017

Price hikes will force 100,000 to quit health insurance

Charlie Weston Personal Finance Editor

UP to 100,000 people are expected to be forced to give up their private healthcare this year as price rises pile the pressure on family budgets.

The prediction came as Health Minister James Reilly admitted that new laws will push up premiums.

The new rules, to be introduced later this year, will see insurers pay whenever someone with health insurance uses A&E at public hospitals.

This will further accelerate the numbers giving up private cover, experts said, as insurance companies will pass on their increased costs to consumers.

In the first nine months of last year some 53,000 people gave up their private health insurance in response to a string of price hikes.

The total number giving up medical cover is set to reach 75,000 for all of last year, insurance expert Dermot Goode said.

And this year some 100,000 people will drop their healthcare insurance, Mr Goode of healthinsurancesavings.ie added.

"Those cancelling tend to be the younger, healthier people. The impact of this is that the insurers are left with higher claims costs, which causes more upward pressure on premiums, and the cycle continues," he said.

A total of 2.17 million people have private health insurance -- a fall of 123,000 since the recession started.

Quinn Healthcare boss Donal Clancy has claimed families and those on the cheapest health plans would be forced to give up their cover over Dr Reilly's decision to hike the levy by 40pc.

The levy for an adult has shot up by €80 to €285, an increase of almost 40pc. For every child with private healthcare, the levy has jumped from €66 to €95.

The levy is a system where a portion of premiums is collected and redistributed to health insurers with older, more costly members.

Dr Reilly insisted that the rise should not mean higher premiums for consumers.

He said yesterday the levy would be replaced at the end of this year with a new system to ensure everyone pays the same premium for the same plan irrespective of their age and health condition.

But he admitted that plans to charge insurers every time someone with health cover uses a hospital would mean premiums will rise.

"That will put upward pressure on premiums. There is no doubt about that," he said.

The VHI says the move will see premiums rising by 50pc. But Dr Reilly insisted there would be savings for insurers from moves to squeeze greater efficiencies from hospitals.

Irish Independent

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