Thursday 26 November 2015

We're paying up to €2,000 too much for health cover

Charlie Weston Personal Finance Editor

Published 09/09/2013 | 04:00

HALF of households with health insurance are paying too much for their cover.

The over-payments are as high as €2,000 each a year for families, an analysis done for the Irish Independent shows.

This means that up to one million people are paying more than necessary for medical cover because they are on 'legacy' plans which have gone up far more than other health plans.

Consumers are confused by constant changes in health polices being introduced by the four players in the market and by new plans being introduced, according to health insurance expert Dermot Goode.

Families could save thousands of euro by switching to a different plan without having to change insurance company, Mr Goode, of, said.

And the savings could be made without having to opt for new "cut-price" plans that are being brought in, but come with a number of restrictions on where you can be treated.

These plans also require consumers to make large contributions towards the cost of some treatments.

He outlined a number of scenarios where families were paying too much.

These include:

* Families putting everyone in the house on the same plan. But families could save thousands of euro by splitting their cover – putting the children on different policies to the adults.

* Many families are insured for private accommodation in private hospitals. But this is not guaranteed and families may be paying too much for something that they may not get. This is especially so for young children or even young adults.

* Large numbers of families pay for day-to-day cover for routine medical expenses on their health policies. But they may be paying more than they will receive as refunds, as the payouts for GP visits are often limited.

* Many customers stay on the same plan and pay too much for their insurance for the wrong reasons. They think they will have to re-serve waiting periods for existing conditions, which is not the case, Mr Goode said.

He said a family with two adults and two children will pay €4,468 a year for VHI's Health Plus Extra. The family could get much the same cover with VHI with the Teachers Plan, and save €1,300.

If the adults opt for the Teachers Plan, but the children are put on the Parents & Kids Excess policy, the savings amount to €1,697.

The same-sized family on Laya's Essential Plus (No Excess) will pay €4,389 a year.

A saving of €1,956 could be made by opting for Laya's Healthwise Plus for the adults, and Family Care for the children.

Similar savings can be made choosing Aviva's Nurses & Teachers Choice (Discounted) over the Level 2 Complete Health Plan.

Mr Goode said: "Consumers should consider health insurance as they do car and home cover. They should review it each year, seek out the best deals, and just switch."

Across the market, there have been cumulative premium increases of between 10pc and 27pc since last October.

And the cost of health insurance has doubled in the past two years, and now averages €2,500 a year for two adults and two children.

This steady rise in the cost of cover has caused almost a quarter of a million people to ditch the insurance since the peak of the boom, official figures show.

And most of those opting out are in their 20s and 30s, a move that has prompted experts to predict another rise in premiums by the end of the year.

Just over two million people now have private medical insurance, out of a population of 4.58 million people.

"If you haven't reviewed your cover in the last three years, the odds are that you're paying too much for your health insurance," Mr Goode said. "Up to 50pc of all of those with health insurance are on the wrong plans based on their requirements, and are paying too much."

A report from the National Consumer Agency last week found that only nine out of 100 consumers had switched health insurer in the last year, despite being able to save at least €500 a year by moving to a different company.


Head of the agency Karen O'Leary advised consumers to seek out better deals. Around half of adults have never checked to see if they could get a better deal by moving to another player.

Mr Goode urged families to make sure to do their homework before contacting their insurer, and tell the insurer the plan they want to consider.

"If they are recommending a lower-cost option, make sure that they explain exactly what you're losing compared to your previous cover," Mr Goode said.

* For tips on how to save money on your healthcare, see www.healthinsurance

Irish Independent

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