Wednesday 27 August 2014

Families face €940 bill over VHI levies

FAMILIES with even the most basic health insurance will end up having to shell out up to €940 a year due to new health levies, according to insurer GloHealth.

The insurer, which entered the market last year, said all medical policies will be hit with the highest level of new levies coming in.

The higher levies, to begin on health policies in March, are to compensate the VHI for having the majority of older, more expensive, customers.

Health Minister James Reilly had promised that those with cheaper policies would only have to pay a small levy.

But it has emerged that the cost of a basic health plan for a family of two adults and two children would jump from €760 at present to €940.

GloHealth chief executive Jim Dowdall warned that around 330,000 people with basic policies would end up subsiding those with more expensive plans to the value of €15m.

Mr Dowdall claimed the levies had failed and that the policy was driving what he called a vicious circle of premium rises. Premiums rose by an average of 20pc last year.

GloHealth entered the market last summer, but its premiums will rise at the end of this month by an average of 6pc.

"There is a serious disconnect between what the Minister for Health told the Oireachtas and what is happening on the ground and the people who will suffer most are those with lower levels of health insurance cover," Mr Dowdall said.

"Many of these consumers are struggling to retain their cover as a result of massive increases in recent years and they should not be asked to subsidise those on higher level health insurance policies."

The GloHealth boss said 188,000 people had given up health insurance since the downturn, and he predicted that more people would be forced to ditch their cover.


He called on Dr Reilly to amend what he said was a flaw in the legislation.

The minister had wanted to ensure that those on basic plans, which range in price from €504 to €613 for an adult, were not hit by high levies.

Every policy currently has a temporary levy of €285 to compensate the VHI.

The levy for basic plans was due to go up €5 to €290, while advanced plans were to be hit with a higher levy.

But it has now emerged that the new higher levy of €350 will apply to all adult policies.

The Department of Health said the Health Insurance Authority had concluded that every policy in the market was an advanced one, because there is some form of treatment offered in a private hospital from all of them.

Irish Independent

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