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Wednesday 27 August 2014

New health cover shock as second biggest firm puts up prices by 20pc

Charlie Weston Personal Finance Editor

Published 31/01/2014 | 02:30

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04/01/2012 VHI House on Lower Abbey Street, Dublin...04/01/2012 VHI House on Lower Abbey Street, Dublin. Photo: Gareth Chaney Collins
VHI House on Lower Abbey Street

TWO more health insurers are to push up the cost of premiums in March.

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Laya Healthcare, the second biggest health insurer, is to hike its prices by 20pc from the start of March.

The rises are double what were expected.

And GloHealth said it will pass on the higher levy imposed on all policies by the Government.

This will increase adult plans by €49 each, and children's premiums by €15 each.

Glo policies went up at the start of January.

Laya blamed changes to Government policy for the massive hike. The insurance provider has close to half a million customers. It is the third price rise announced by Laya in just over a year.

The move will send its mid-range Company Care With Excess plan up by €500 a year for a family of two adults and two children.

When restrictions on tax reliefs on health policies imposed in the Budget are taken into account, the same plan for a family will have shot up by €1,016 in a year.

This is a rise of 36pc, according to Dermot Goode of Healthinsurancesavings.ie.

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Laya's cheapest plan, Essential Connect Family, is set to go up by close to €290 a year for a family of two adults and two children.

Laya's top plan, Essential Plus, will rise by €900 for a family for those renewing from March, or taking out the plan then for the first time.

When the impact of tax relief changes are accounted for, the cost for a family will have jumped by €1,578 by March. This is a rise of 37pc, Mr Goode said.

He said he was shocked at the extent of the Laya rises, with the market expecting a rise of 10pc. Many people would now reconsider remaining insured with such high, and so many, premium price rises.

The move by Laya comes days after VHI Healthcare said it was pushing up its plans by an average of 3pc from March 1. Some VHI plans will go up by 6pc. There have been six VHI increases in the past three years.

The latest hike by the VHI will mean families will have to pay an extra €250 a year for cover with the state company.

Laya blamed the rise in the levy imposed on policies of all insurers from March. The adult levy will rise by €49 per person. This is to distribute money among insurers to compensate them for having older, more expensive customers. VHI is the main beneficiary.

Laya managing director Donal Clancy said: "We are very conscious of the impact the market is having on our members. Unfortunately the market has come under unprecedented pressure from major increases by the Government, specifically further hikes to the Government health levy and the public beds redesignation charge."

He said the net cost of the levy to Laya will be around €72m in 2014 – an increase of 33pc compared with 2013.

Irish Independent

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