Fears VHI on brink of raising premiums by 20pc
Tuesday November 10 2009
STATE health insurer VHI has put off meeting an Oireachtas Committee until the new year, prompting accusations it is preparing to hike its premiums by 20pc in the next few weeks.
The healthcare company put up premiums by an average of 23pc at the start of this year.
A further hike of 20pc would mean premiums will have risen by almost half in 12 months.
Fine Gael health spokesman James Reilly accused the company of seeking to avoid the scrutiny of the Oireachtas Committee on Health because it is preparing to push up its premiums.
The VHI did not deny yesterday that it was planning a rise in premiums but insisted no final decision had been made.
It admitted that it had announced the hike that took effect at the start of this year in November last year.
Senior executives from the VHI were due to appear before the Oireachtas committee last week, but that appearance will not now be until January 19 next. A spokeswoman for the insurer said VHI boss Jimmy Tolan and his team had not been able to make last week's meeting.
But Dr Reilly claimed the state insurer was planning to avoid having to confront TDs and senators before it hikes its premiums.
Dr Reilly criticised the Fianna Fail members for allowing the VHI to put off meeting the Oireachtas committee until the new year. Other health insurers were also due to appear before the committee, along with the regulator.
A rise of 20pc in premiums for VHI's 1.5 million customers would mean an increase of almost €400 in the annual cost of health cover for a typical family. A family with two children who have Plan B Excess is currently shelling out €1,854 a year for private health cover. But this would rise to €2,224 if a 20pc rise was pushed through.
Expectation
A 20pc hike in premiums will mean an increase in their health cover by more than €700 since last Christmas.
Hibernian Aviva hiked its premiums by an average of 12pc last month, with the expectation that Quinn Healthcare is also preparing to charge its customers more.
The move by Hibernian Aviva added €140 a year to the costs of its Level 2 Hospital plan. Health insurance costs are rising because of the introduction of the private healthcare levy last year. This added €160 to the cost per adult of premiums.
- Charlie Weston Personal Finance Editor
Irish Independent
