Tuesday 19 September 2017

Your Questions: 'As a bachelor, can I drop maternity cover from health insurance to reduce my bill?'

Considerable savings can be made by taking on an excess Stock pic: Depositphotos
Considerable savings can be made by taking on an excess Stock pic: Depositphotos

Dermot Goode

I'm a single man in my 40s. I have no interest in getting married or having children. My private health insurance policy includes maternity, psychiatric and other benefits which I have no use for. Can I ask my insurer to remove those benefits and reduce my premium accordingly?

Tadhg, Tarbert, Co Kerry

Unfortunately not. A certain minimum level of cover must be included by law in all health insurance plans to comply with the 'minimum benefit' criteria set out in the health insurance legislation.

For example, all plans must provide at least 100 days psychiatric cover and must include certain minimum benefits for hospital treatment, convalescence and even maternity. The reason for setting out these minimum benefits is to ensure that every plan introduced to the market provides a certain standard of cover - otherwise, insurers might be tempted to only include benefits of value to younger members and exclude high-cost covers. For example, consider a member who is availing of treatment for an underlying psychiatric problem. The 100 days of minimum psychiatric cover could be worth between €50,000 and €75,000 each year to that member.

All plans must also provide up to 91 days' cover every five years for the treatment of certain addiction problems, which is a valuable benefit too. In other jurisdictions that don't have this minimum benefit criteria, we see insurers offering very little cover for some of these high-cost medical expenses. Therefore, if you see benefits on your plan that are of no relevance, please ignore them. Even if they were removed or hidden, it would have little or no impact on the cost of your cover.

I am thinking of switching my private health insurance to a different company. I have had back trouble for the last few years, however. If I go to switch, will my cover for back complaints be restricted by the new insurer?

John, Carrigaline, Co Cork

Yes - but only to the level covered by your previous plan. Whenever you are changing cover, you need to be aware of the upgrade rule. This rule applies equally across all health insurers. Under the upgrade rule, if you change your cover to one which gives you enhanced hospital benefits, all insurers will restrict your cover for any pre-existing medical conditions to that of your previous plan. This restriction will apply for two years from the date of your new plan. For any new medical conditions arising after the effective date of the plan change, the new benefits will apply immediately - assuming all other waiting periods have been served. For example, take a case where a member is insured on a plan that provides cover for a semi-private room in a private hospital and he is considering changing to a new plan that covers a private room in the same private hospital. If he has already been insured for five years or more and is in good health, then the private room cover will commence immediately on joining the plan - irrespective of whether he is paying a reduced premium or not. However, if he has an existing condition such as a back complaint, then he will only be fully covered for semi-private accommodation for this condition for the next two years (as per the benefits of the previous plan). For out-patient benefits or day-to-day refunds, some insurers apply a short waiting period of six months if you switch to a plan that gives better refunds than a previous plan - or to a plan that has a lower or zero excess (the first part of a claim you must pay yourself).

My private health insurance is coming up for renewal. I'll struggle to afford it this year. I'm thinking of moving to a cheaper plan where I take on a small excess. Is this a good idea?

Valerie, Lucan, Co Dublin

Yes, this is probably the most effective way of reducing your overall costs. Excesses, which are the first part of a claim you must pay yourself, only apply to private hospital admissions and in most cases are per stay or per claim - but not per night. So if you have an excess of €125 per claim, this is your maximum liability - irrespective of whether you're admitted for one night or a month.

Considerable savings can be made by taking on an excess. For example, a member on the VHI Health Plus Access (Plan B) can reduce their costs from €2,046 to €1,646 per adult by opting for the VHI Health Access scheme - which has an excess of €125 per claim. Most of the excellent value corporate plans on the market all include small excesses. These include VHI's PMI 3513 - where the excess is €100 per claim; Laya's Connect Choice, which has an excess of €125 per claim; Irish Life Health's Best Smart plan, which has a €100 excess per claim; and GloHealth's Better Smart Cash plan which has an excess of €100 per claim.

You need to consider the worst-case scenario when thinking of taking on an excess. For example, if you are faced with multiple private hospital admissions, can you afford to cover the excess each time? The savings you could make by switching to a plan with an excess need to be substantial enough to ensure those savings are not wiped out by frequent admissions. For procedures such as chemotherapy and radiotherapy, most insurers will usually deduct one excess only per course of treatments - or in some cases, deduct no excess.

I am still paying private health insurance for my 26-year-old - who is a student and still living at home with us. If I delete him from the policy, am I correct in assuming that he can be treated in the public system free-of-charge?

Robert, Maynooth, Co Kildare

Unfortunately not. While every citizen is entitled to access treatment via the public health system, it is not free unless you have a medical card. Otherwise, a charge of €100 applies if you use the accident and emergency (A&E) services - and if you are admitted for an overnight stay, you are liable for a charge of €75 a night or up to €750 in any one year. This charge applies irrespective of whether you're a child or an adult. This charge should be weighed up against the cost of maintaining private medical cover. Most insurers have good value plans costing approximately €880 per adult. These plans cover most public and private hospitals, which is the standard you need to achieve if you want cover that will work for you in the event of ill-health. Apart from the cost of using our public health system, you also need to be aware of the waiting lists for treatment. At the start of this month, there were over 440,000 people waiting to see a consultant on the public health system - with a further 80,000 waiting for surgery. Depending on the treatment required, the wait time can be anything from a few months to over a year - or even longer in some cases. If you want to ensure you have access to medical treatment when you need it, you either need to have a healthy bank balance or have good quality medical insurance in place. In this case, the advice would be to maintain cover for your son if at all possible - and perhaps have him pay for his own cover in his own name.

Email your questions to lmcbride@independent.ie or write to 'Your Questions, The Sunday Independent Business Section, 27-32 Talbot Street, Dublin 1'.

While we will endeavour to place your questions with the most appropriate expert to answer your query, this column is a reader service and is not intended to replace professional advice.

Health cover analyst with totalhealthcover.ie

Sunday Indo Business

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