Jerome Reilly: Insurers go to war as more than 500,000 renew cover
Families will be shocked by price hikes and huge array of new policies that have recently come on the market
Published 05/01/2014 | 02:30
THE battle for the hearts and premiums of more than 500,000 people due to renew health cover this month intensified last week as the big four insurers waged a cut-throat price war, offering a range of new perks and special offers.
Many families have been shocked by price increases on many standard plans and are confused about their options, as there are a mind-boggling 300 different health plans on offer.
One Wexford couple with three dependent adult children, two in full-time education and one in a low-paid internship, received a demand for €7,131.57 to renew their standard family cover plan with VHI.
And those insured with the other big players in the market -- Laya, Aviva and GloHealth -- have received similar demands showing sharp increases for 2014.
But with one in four of the 2,047,000 people insured with in-patient health insurance up for renewal in the next four weeks, there is now intense competition -- and not just on price.
Typical of the range of perks on offer to attract customers is a GloHealth offer of half-price premiums for children between the ages of three and four years on eight of their plans.
Laya Healthcare is waiving new condition waiting periods for new customers and has launched 21 new plans, including a basic package priced at €495 a year for an adult.
That move was in response to a range of different new policies offered by rivals.
At the same time, VHI Healthcare is also offering half price for children on four plans, including those specifically targeted at teachers and nurses.
And Aviva has launched six new plans providing cover for a semi-private room in both public and private hospitals with varying excess charges in the different private hospitals.
But the number of people who have health insurance continues to decline because of emigration, the recession and the rise in the cost of health cover.
The market actually peaked at the end of 2008 -- just as the recession hit.
Since then 250,000 have left private healthcare. The percentage of the population with in-patient health insurance plans now stands at 44.6 per cent -- down from just under 51 per cent five years ago.
Just over 11,000 cancelled their cover in the quarter ending last September.
VHI remains the big player with 55 per cent of the market. Laya Healthcare has 23 per cent; Aviva Health 16 per cent and GloHealth 6 per cent.
But as well as hikes in the price of cover, consumers are also coming to terms with reduction in tax relief.
Tax relief for medical insurance premiums is now restricted to the first €1,000 per adult insured and the first €500 per child insured, including students aged 18-22 years in full-time education.
That move by Finance Minister Michael Noonan in the October Budget will have the biggest impact on older customers who like the security of "blue chip" cover and do not want to be hit with excess hospital charges for hip, knee and other procedures.
It means their health cover will end up costing them up to €250 more than last year.