Thursday 22 June 2017

Editorial: Late-entry loading for health cover a no-brainer

Late joiners will have to pay more for health insurance
Late joiners will have to pay more for health insurance

The salient question around the decision to charge higher premiums for people who join the health insurance market late is, why did it take so long? From next year, people aged over 35 who take out health insurance for the first time will be charged a penalty for their late arrival. The extra cost will be worth an extra two per cent a year. Allowance will be made for previous periods during which the individual held health insurance and for periods where they were unemployed during the economic downturn and, therefore, couldn't afford health insurance. Existing health insurance customers who retain their cover will not be affected.

Known as Lifetime Community Rating, the measure was finally signed into law by Health Minister James Reilly. The move is probably one of his final acts as Health Minister, before he is dropped from the position in the reshuffle.

Under the current system, age at entry into the private health insurance cannot determine the premium a person would pay. The health insurance market needs young people to come in and help to pay for older people who make claims.

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