Optimism dashed as premium price hikes back to haunt us
Published 29/05/2015 | 02:30
For a while, the news on health insurance for consumers was good. The numbers taking out cover has been growing for the first time in three years.
We saw a surge of 74,000 buying plans in April alone.
This was put down to new rules that came in at the start of this month, known as life-time community rating. If you are over 35 and you take out health insurance for the first time from this month on, you will be penalised.
Insurers had reacted to these new rules by launching a range of cut-price plans to entice people into the market.
Other more traditional plans saw their prices come down. Both Laya and VHI announced price cuts and promised to freeze premium rates on other plans.
Health Minister Leo Varadkar helped by resisting increases in the State levy imposed on all policies.
All of this raised the total number of people with health insurance to 2.1 million - the highest level since December 2012.
Combined, this gave reasonable grounds to hope multiple premium rises each year were a thing of the past.
Then Aviva announced its second rise of the year. This time, premiums on more than 100 plans are set to rise by an average of 5.5pc, with some going up by 15pc.
The increases will mean some plans rising by between €200 and €470 a year for families.
One of the entry-level plans, Select Starter - brought out to capture those getting into the market ahead of the life-time community rating changes - is going up by 12pc.
Aviva blames an ageing customer base making more claims for procedures on the need for the rises.
The fear is that others will use the Aviva rises as cover for its own hikes, at a time when increases have been muted. The indications are that VHI and Laya have no plans for similar rises just now, although entry-level plans may go up.
The market is still lop-sided and while the influx of new members in April has helped, our best hope is that the overall numbers with health insurance will continue to grow.