Simon Harris calls on health insurers to resist pushing up premiums in response to levy increase
Published 11/11/2016 | 13:59
Health insurers were called on by Minister Simon Harris to resist pushing up the cost of premiums in response to a rise in the levy imposed on all policies.
The levy is set to rise by 10pc from the start of April, a move financial experts said would see insurers passing on the costs to consumers.
The levy is imposed on insurers to ensure that no one pays any more than anyone else for the same level of cover, irrespective of age and health status.
The money goes into a pot and is then distributed to those with older and sicker policyholders, to ensure premiums are the same for everyone with the same type of cover.
But the levy hike is set to make health insurance more expensive.
It comes after the VHI, Laya and Glo have all increased premium rates already, blaming higher charges in public hospitals imposed by the Government.
From April the levy on most adult policies will be €444, a rise of €41 since last year, after a determination made by regulator, the Health Insurance Authority.
Independent broker Dermot Goode, of Totalhealthcover.ie, said the move would lead to higher prices from April.
He said insurers were already planning hikes in January, to take account of charges imposed on those with medical cover for using public hospitals.
“This is not just a levy on insurers – it’s a levy on private health insurance customers. As with any levy the health insurers will have no choice but to pass it on to consumers in the form of higher premiums, which means another round of price hikes for hard pressed consumers.
“All of this on the back of increases of up to 10pc on typical premiums over the course of the last 12months,” Mr Goode said.
The health insurance levy was introduced in 2009. It is part of the system of risk equalisation which aims to ensure everyone pays the same price for the same level of cover no matter what age they are or how health they are, Mr Goode said.
The latest rise will have meant the levy will have gone up by 185pc, from €160 per adult seven years ago.
Health Minister Simon Harris called on insurers to absorb the cost of the levy and not pass it on to consumers.
But Mr Goode said this was “naïve”.
“That is naïve. There will be increases. It will be passed on,” he said.
In the last while both VHI and Laya have imposed average rises in popular plans of 10pc, with GloHealth plans set to go up by an average of 6pc next month.