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Sunday 31 August 2014

Sixth hike in health cover as Aviva goes up 13pc

Charlie Weston, Personal Finance Editor

Published 19/02/2014 | 02:30

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This pressure is adding to ongoing factors such as a generally ageing population, advances in medical technology and increasing incidence of chronic illness.

A SIXTH rise in health insurance premiums is being imposed on families – just two months into the new year.

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Aviva is to announce today that it is raising premiums by an average of 13pc from next month, but some are going up by 20pc, the Irish Independent has learned. The rises will mean an extra €760 in annual costs for a typical family.

It is the second Aviva rise this year, and follows two rises from GloHealth, one from VHI and rises of up to 40pc from Laya Healthcare.

Aviva already raised premiums by 5pc with effect from the start of this year. Now it is imposing double-digit rises from March 23 – with an average rise of 12.7pc.

Plans going up by 20pc are Aviva's Level 2 Hospital, Level 3 Hospital and Level 4 plans. There will be a 15pc rise on the Level 5 plan.

There will be no rise in the cost of the cut-price Focus Value plan. This is €549 for an adult but only provides cover for a select number of hospitals.

The move means it will cost an adult €760 extra a year to renew or take out the popular Level 2 Hospital plan for a family of two adults and two children. Aviva said the higher premiums will apply for those renewing or taking out new policies from March 23.

Health insurance expert Dermot Goode, of healthinsurancesavings.ie, said there has been nine separate rises since the middle of December.

"The increases are not surprising given the additional costs being passed on to the health insurers in the form of new public hospital charges and higher health levies," he said.

Chief executive officer of Aviva, Alison Burns, blamed the Government decision to charge insurers more for using public beds in public hospitals.

The change, introduced by Health Minister James Reilly from the start of this year, means insurers could have to pay out €800 a night for a public bed in a public hospital.

Up until recently, this charge was only imposed on private beds in public hospitals.

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Ms Burns also blamed higher levies imposed on all policies to ensure everyone with the same level of cover pays the same, irrespective of the state of their health and their age. She added that more claims were being made on insurers by members.

Aviva Health has worked to contain its costs by carrying out clinical and claims' audits and has engaged in robust negotiation with its medical providers, she insisted.

"But we can do nothing about costs that are beyond our control," she said.

In the last Budget the Government also restricted the tax relief on health cover, a move that sent premiums up by up to €350 for a family.

VHI is to increase premiums by an average of 3pc from the start of next month, but some plans will go up by 8pc.

Laya, the second largest player in the market, is pushing up premiums by an average of 20pc from next month also. But some plans are rising by 40pc.

GloHealth increased premiums by 5pc at the start of January, and it will raise the cost of adult policies by €49 from next month.

Irish Independent

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