Laya follows VHI fees hike with double-digit price rises
THE second largest health insurer in the market is set to announce double-digit premium rises.
Laya Healthcare, which insures around half a million people, will push up the price of its plans by more than 10pc, effective from the start of March.
The move comes after VHI Healthcare said it was to increase prices across a number of its plans by an average of 3pc from next month. The move will impact on 1.2 million customers.
Now Laya is under pressure to increase its premiums. The company's last rise was in April last year.
A rise of 10pc would send its cheapest plan, Essential Connect Family, up by close to €200 a year for a family of two adults and two children.
A rise of 10pc will send Company Care with Excess up by €838 for a family of two adults and two children, when the price rise and the Budget changes to tax reliefs are added together, according to Dermot Goode of Healthinsurancesavings.ie.
Industry sources said the company had no choice but to impose a rise three times higher than the VHI because it was being hit with higher costs.
All insurers are facing massively higher costs due to the government decision to charge everyone with private health insurance for the use of a bed in a public hospital.
And medical claims are rising by 8pc a year as younger people leave the market and those who are still insured have more procedures carried out.
And higher levies will be imposed on every health insurance policy from the start of March. The levy on each adult policy is set to rise by €49 to €399.
This is imposed to ensure everyone with the same level of cover pays the same premium, irrespective of how healthy they are and how old they are.
Changes in the tax reliefs for health policies have also made cover more expensive. The restriction on the tax relief has added around €350 to the overall cost for a mid-range family's policy.
Meanwhile, VHI chief executive John O'Dwyer said the increases were necessary to offset costs incurred by the company since charges for private patients occupying a bed in public hospitals were introduced on January 1. He said the full impact of these charges was still uncertain.
The insurer's most popular plans from the One Plan range will increase by about 2pc.
"We are aware of the enormous financial pressures facing our customers and have sought to keep the price increase as low as possible," Mr O'Dwyer said.
"We will continue to prioritise cost management with a view to bringing down costs for the customer while retaining quality of care, developing best practices, encouraging best possible outcomes and at the same time ensuring that there is no over-utilisation."
The company said it achieved a 3pc reduction in the cost of claims last year through a combination of measures, including claims efficiency programmes, reduced fees for providers, increased activity in the special claims investigation unit and by transferring medical procedures to lower cost settings.