Monday 25 September 2017

Basic health fees funding top-of-range care deals

Private insurers must strive to give better value to struggling customers

Terence Cosgrave

CONSUMERS paying a basic fee for health insurance are "cross subsidising" top-of-the-range care packages with "all the frills", a national conference will be told next week.

Young and healthy people are also joining the exodus from private health insurance, leading to a price spiral that is "unsustainable", according to Donal Clancy of Laya Healthcare who will address a national conference on the subject on Wednesday.

"We have to strive to provide better value. Overall health insurance is increasing and value is on the decline.

The health levy is up 119 per cent per adult since 2009 and claims are up 10 per cent this year. And at the same time we've got to fight to get better value," he said.

"My core message is that the price spiral that is taking place has to stop.

"Over 64,000 people left last year – the numbers are just getting worse and worse. And it's the young and healthy who are leaving. They need incentives to stay."

Mr Clancy advocates incentives to get young people to stay in the system.

One of his ideas is if you sign up for private health care at 35 you should pay the same rate for the rest of your life.

"People are joining at 50 and they get the same benefits as people who have had health insurance all their lives."

This, he says, is unfair and unsustainable.

He believes risk equalisation should only apply to a core set of benefits.

"If you're paying an annual fee of say €700, you shouldn't be cross-subsidising someone who is paying €4,000 or €5,000 a year for a private room and all the frills," he argues.

"It shouldn't be put into the same pot. If you want a private bed or you want a special breakfast you should pay for the additional stuff, but the core set of benefits should be cross-subsidised."

He also believes that the public and Government must get realistic about the cost of local hospital services.

"We all need to change our thinking. If you are ill you need to be treated in the best place to treat your illness – a centre of excellence – no matter where that is.

He also believes the figure of 64,000 people giving up private medical insurance is just "the tip of the iceberg".

"In my view, it's far higher," says Mr Clancy.

"You'll automatically have organic growth as the people joining through group or work schemes will be bigger than the numbers who die, so we would expect to increase anyway.

"That means that the overall number of people who are lapsing much higher than 64,000. That can't continue."

Meanwhile, 100 health care professionals including GPs, hospital consultants, nurses and HSE staff unanimously agreed that our health service was in need of reform during a recent telephone poll.

The survey was conducted this month by the market research firm, Real Insights.

When asked if Ireland's health system was designed to protect the people that needed it most and ensure that better outcomes for patients were delivered, only 24 per cent of respondents agreed, with more than three-quarters disagreeing.

The results of the survey also reflected recent developments in private insurance in this country as large swathes of the middle classes can no longer pay their premiums.

When asked if private health insurers were providing good choice and value to Irish consumers, only 40 per cent agreed.

Irish Independent

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