Wednesday 28 September 2016

Move will strike many as sharp practice after thousands sign up

Published 06/06/2015 | 02:30

It is hard not to be cynical about health insurers
It is hard not to be cynical about health insurers

It is hard not to be cynical about health insurers.

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Just weeks after thousands of new customers joined the market, some of them start withdrawing and hiking the cost of the very health policies they brought in to lure them.

A unique situation presented itself up to the end of April.

So-called life-time community rating came into effect on May 1, meaning penalties being imposed on the over 35s who take out cover for the first time.

The penalties amount to 2pc on top of the premium for every year over the age of 35 a person is when taking out cover for the first time.

Lifetime community rating was put in place to get more young people to enter the market and bolster community rating - where everyone pays the same price for the same level of cover, irrespective of their age and health situation.

This prompted an unprecedented surge in new health insurance customers.

Some 74,000 people responded by taking out cover for the first time.

Many bought new low-cost, entry-level plans launched specifically to lure new members, with some of these as cheap as €400 a year.

Assurances were given that the prices would not be raised as soon as the new members signed up.

But just weeks after the deadline passed for avoiding huge penalties, this newspaper revealed that Aviva plans to push up the cost of its cheap, entry-level health plan it had introduced to get people to join it. Its Select Starter entry-level plan will go up in July.

Laya Healthcare has now gone one better.

Just weeks after the lifetime community rating deadline, the Cork-headquartered company will withdraw its cheap-as-chips Assure First scheme with effect from July 1.

This plan is good value at €395, and provides cover for treatment in public hospitals only, with a €100 excess (the amount you have to pay yourself) on consultant fees.

Those on the plan are now likely to face steep hikes by having to take out a new plan in a year's time.

Assure First was only introduced on April 13.

Laya is also pushing up the cost of a string of other entry-level plans.

Assure Vitality, Assure Health and Assure Ideal had seen their prices reduced before lifetime community rating came.

The cost of Assure Vitality will now rise by close to €70 to €499 from July.

Laya boss Donal Clancy insisted that just 1pc of its members will be affected by the scrapping of its Assure First health plan.

That may well be the case, but the move will strike many as sharp practice.

Irish Independent

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