Thursday 23 October 2014

Getting to grips with the new policy rules

Published 08/07/2014 | 02:30

Q At the moment everyone pays the same price for the same level of cover. Is that correct?

A Yes, everybody is charged the same premium for a particular health insurance plan irrespective of their age, gender and the current or likely future state of their health. This is called community rating.

Q So what is this new twist on community rating?

A The Government is keeping community rating, but tweaking it to reflect the age at which a person takes out health insurance.

From May, late-entry loadings will be applied to the premiums of those who join the market at age 35 or over. If you take out private health insurance earlier in life, and retain it, you will pay lower premiums compared to someone who joins when they are older.

Q Who will pay this loading?

A The loading will be applied at a rate of 2pc for every year over the age of 35 of the person taking out health cover. So a 40-year-old will face a 12pc loading.

But there will be a grace period which will allow anyone who never had a policy, and those in and out of the market, to take out a policy before next May without being hit with any penalty.

Q But I have always had health insurance and I am now in my 60s. Will I be affected?

A No, unless insurers use the expected surge in new entrants to cut all premiums.

Q I have had health insurance for nine of the past 10 years. How will I be affected?

A You will get credits for the nine years you had a policy.

Q I was unemployed for the past two years. Will this cost me if I now take out a policy?

A Those who are unemployed, but previously had health insurance, will get credit even though they did not have cover. There is a limit of three years on this.

Irish Independent

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