Monday 24 November 2014

Families will have a cheap way to stay covered

Published 18/08/2014 | 02:30

INNOVATIONS in the health insurance market are thin on the ground.

Instead, the two million people with private medical cover have had to endure premium rise after rise to the point where affordability has become a massive issue.

The generation who have children - often saddled with massive mortgage debt, and suffering from job losses and pay cuts - has been asking itself if it would not make sense to ditch their health insurance cover.

Many have dropped their cover. Most of the 300,000 people who have dropped out of the market since the squeeze on household incomes began in 2007 are in their 30s and 40s.

The four insurers - VHI, Laya, Aviva and Glo - have been considering various ways to ensure this generation stays insured and others under the age of 50 join for the first time. The other insurers have looked at a range of new ideas but only GloHealth has come up with a radical plan.

Its innovation will allow people to buy a cheap plan but then upgrade to a full hospital plan if needs be. The key revolution here is to waive the two-year waiting period for hospital treatment for those who buy the cash plan.

If these people with the cash plan need to go into hospital, they will be able to upgrade to a full hospital plan, and only have to pay the difference between the price of the cash plan and the hospital plan.

The hope now is that rivals VHI, Laya and Aviva will come up with a similar scheme in what would really shake up the market, and cut the price for this new type of cash plan .

The downside is that the cash plan will not count when it comes to new community rating rules from May that will penalise those who do not have a full health insurance plan with higher premiums, if they decide to join the market.

But the new GloHealth move will ensure that more people have some form of medical cover.

Now, if only the Government would stop making changes that makes cover more expensive. But that's another story.

Irish Independent

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