Wednesday 7 December 2016

Aviva is accused of misleading public over price hike

Charlie Weston and Eilish O'Regan

Published 29/01/2011 | 05:00

HEALTH insurer Aviva was accused yesterday of misleading thousands of consumers who switched over to it in the past three weeks.

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The company had insisted it was not planning a price hike.

In the past three weeks alone, some 30,000 people have moved to Aviva, mainly from the VHI, to avoid the massive increases being imposed by the state-owned health insurer.

Aviva has had to draft in extra staff to cope with the demand.

But shocked consumers were left reeling yesterday after Aviva confirmed it was planning to hike all its premiums by 14pc across the board on March 1.

The rise is 10 times the rate of inflation and comes at a time when consumers are being pounded by income tax changes and the universal social charge.

The move will mean it will cost a typical family with two adults and two children an additional €284 a year in premiums. And there were predictions that thousands of hard-pressed people would be forced to opt out of private medical insurance now that the three providers (including Quinn Healthcare) are pushing through huge price rises.

Consumers' Association boss Dermott Jewell accused Aviva of misleading consumers into believing there were no premium hikes planned.

"People were sold a pup here. Three weeks ago Aviva insisted it was not planning to put up prices. Now they have," he said.

Aviva chief executive Jim Dowdall had gone on RTE earlier this month to insist the company had no intention of raising its prices.

People have been moving over to Aviva in their droves after the VHI said on January 6 it was putting up its premiums by between 15pc and 45pc from next Tuesday. Yesterday Mr Dowdall denied his company had cheated or misled consumers.

He insisted Aviva constantly reviewed its prices and said it was left with no option but to impose the huge jump in premiums by medical inflation and higher costs for using a private bed in a public hospital.

He blamed the Government for imposing higher costs for using public hospitals and for raising the levy on all policies to help compensate the VHI for its older customer base.

Mr Dowdall said the 14pc increase was less than other players in the market. Quinn Healthcare has already announced rises of 8pc, with some of its health plans going up by 25pc. The rises take effect on Tuesday also.

Meanwhile, Aviva was forced to apologise to the VHI last night after mistakenly claiming its most popular plan would be €1,178 cheaper than the VHI main one.

Aviva had claimed its Level 2 Hospital plan would still end up €1,178 cheaper than VHI's Parents and Kids plan for a family of two adults and two children, even after a premium rise.

But it was forced to admit this was incorrect; the correct difference in price is €222.

Chief executive of the Irish Brokers' Association, Ciaran Phelan, said the enormous rises from the three health insurers meant young families with big mortgages would have no choice but to drop private medical insurance.

"The increases in the cost of private health cover dwarf those in other countries and may ultimately lead to a situation where younger people, particularly those with large mortgages, opt out of the system due to absolute affordability," he said.

Standards

"We appear to have an Irish/American health system -- Irish standards, with American prices," Mr Phelan added.

The new Aviva prices will take effect for anyone renewing or switching from March 1.

VHI's popular family plan, Parents and Kids, is set to go up by more than €330 for two adults and two children from Tuesday. Its Plan B Options will cost €444 more for an adult, with other plans increasing by 35pc and 15pc. Healthcare experts said up to 1,000 people a week were already giving up insurance before Christmas.

Meanwhile, VHI insisted only a small number of its customers would lose out by its controversial move to reduce cover in one of its most popular plans.

The Health Insurance Authority, which polices the industry, confirmed it was investigating the decision by VHI to change the cover offered in its heavily marketed Parents and Kids Plan.

Editorial comment: page 24

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