'Thousands will drop health cover' if €1,000 insurance hike goes ahead
Price hikes and changes to tax reliefs on health insurance policies would make cover so expensive it will force thousands of people to opt out, it has been claimed.
Families face paying an extra €1,000 for insurance due to a combination of price hikes which are going through the system, if proposals to scrap the tax relief on policies are implemented.
Health insurance expert Dermot Goode said most families were already likely to be hit by cumulative increases of between €300 and €500 due to price rises already announced.
He said insurers had hiked the cost of cover due to Government-imposed rises in the levy on all private health insurance policies, public hospital charges and general medical inflation.
"Eliminating tax relief could add a further €600 to family healthcare costs, which most simply cannot afford," said Mr Goode, of TotalHealthCover.ie.
He said the cost of the Laya Connect Choice plan had increased by €508 from the start of April for a family of two adults and two children.
"Take away the tax relief and this plan increases by approximately €1,100," he said.
The new Oireachtas Future of Healthcare Committee is set to recommend that the tax relief on health insurance policies be scrapped or scaled back - even though Fine Gael does not agree with this plan.
The tax relief is limited to €1,000 for each adult, and €500 for each child. The relief is applied at a rate of 20pc. This effectively reduces the consumer cost of cover by €200 per adult.
Mr Goode said that even low-level plans would be hit if the relief went.
One adult on an entry-level plan currently paying €500 net would have to pay €625, an extra cost of €125 due to price rises and the loss of the tax relief.
Older members on plans with no excess or shortfalls would be hardest hit - especially if they are retired and on fixed incomes.
Mr Goode said two adults on the VHI Health Plus Access plan faced an increase of around €295 on their cover if they renewed from May onwards.
If the tax relief is removed, the increase will be €695.
The controversial proposal to scrap the tax relief comes days after the levy on all private health policies went up by 10pc to €443 per adult.
Already this year there have been double-digit rises in the cost of cover. VHI, Laya and Irish Life have blamed the rising costs of claims for medical procedures, with hospital double- charging also blamed by Laya and Irish Life.
Mr Goode said any move to remove the tax relief on policies would force thousands of people to abandon their cover.
"This does not make any sense. It would be a disastrous move and would force young people in particular to drop their cover. The system needs a flow of young people to keep it running," Mr Goode said.