Irish News

Friday 25 July 2014

VHI hikes cost of two popular plans by €290 a year

Charlie Weston Personal Finance Editor

Published 21/01/2014|02:30

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VHI customers are facing a price rise

THE cost of two popular VHI plans is set to shoot up by €290 per adult from the start of next month.

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Families have been warned to expect a raft of health insurance premium rises.

Market leader VHI said it was pushing up the premiums on two popular plans by 5pc from the start of next month.

The combination of higher prices and changes in the last Budget to the tax treatment of premiums means the cost of the VHI's Teachers, and also its Nurses, plan will have jumped by 25pc when compared with this time last year.

An adult was charged €1,115 to take out the Teachers Plan in January last year.

From the start of next month the adult cost of the plan will have jumped to €1,445 - a rise of €290 per person.

For a family with two adults and two children, the cost of the Teachers plan will be €665 higher compared with the price in January last year.

It is the first time since last year that the VHI hiked its premiums.

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Thousands of people are set to be affected by the higher costs for the VHI Teachers and the Nurses plans, said Dermot Goode of Healthinsurancesavings.ie.

The Teachers and the Nurses plans are corporate plans, as they were originally designed to appeal to nurses and teachers only.

But anyone is entitled to take out a corporate plan, and thousands took out these plans because they offer good value.

They have been heavily recommended by consumer experts in the Irish Independent, particularly after the old Plan B and Plan B Options went up by 35pc and 45pc in price three years ago.

Mr Goode said: "Teachers Plan is a good mid-level plan that covers all public and private hospitals (semi-private) with no excess to pay. High-tech hospitals such as Mater Private and Blackrock Clinic are fully covered for certain cardiac and day-case procedures only."

It is now expected to increase the cost of all of its almost 100 plans in the coming weeks.

This time last year VHI pushed up the cost of all plans by an average of 6pc.

Both Aviva and GloHealth imposed rises of 5pc at the start of this month. Mr Goode said he now expects more rises from both the VHI and Laya.

And even more rises are expected in March, when new levies on each policy are imposed.

The levy on each adult policy is set to rise by €49 to €399. This is imposed to ensure everyone with the same level of cover pays the same premium, irrespective of how healthy they are and how old they are.

VHI is the main beneficiary of the levies.

However, he said there are "restricted procedures" on this policy which refers to a list of 22 procedures where a 20pc shortfall applies if performed in a private hospital.

A spokeswoman for VHI said: "VHI Healthcare will increase the annual premium of its Teachers and Nurses plans by 5pc with effect from February 1, 2014.

"The timing of this pricing change reflects the renewal times for these two plans and is generally considered separately to any other products."

She said the premium increase was necessary to cover the costs of providing its customers with access to healthcare and was driven by an increasing volume and cost of claims, an ageing membership and ongoing medical innovations which have an impact on the cost of care.

"No decision has been made on pricing for other plans at this point in time," she said.

She said similar plans, Teachers Plan Select and Nurses Plan Select, have a special offer at the moment where children go half-price.

Irish Independent

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