Friday 21 June 2019

Charlie Weston: Time for some real action to stop older people being ripped off for health insurance

'The HIA has calculated that the overcharging amounts to 33pc for those over the age of 60.' (stock image)
'The HIA has calculated that the overcharging amounts to 33pc for those over the age of 60.' (stock image)
Charlie Weston

Charlie Weston

We have been told again by the regulator for health insurance that older people are paying more than everyone else for their private health cover. This is scandalous and requires far more than some tut-tutting from the regulator, the Health Insurance Authority (HIA).

The details of what is happening are shocking.

In the last two weeks, the HIA has told us that people over the age of 60 are paying far more for private health insurance - even though the law dictates that you cannot be penalised by an insurer based on your age.

The HIA has calculated that the overcharging amounts to 33pc for those over the age of 60.

That means that someone over the age of 60 is paying a premium that is on average €400 more expensive a year than someone on a typical plan who is half their age.

Insurers are pulling this off by segmenting the market. They do this by targeting product features and benefits at certain age groups, something that is not illegal but has the effect of forcing older people to pay more.

The HIA explained in its annual report that "older consumers are likely to have a greater requirement for full orthopaedic cover, which was only available with more expensive policies in two of the three open-enrolment insurers at end 2017. On average, older consumers desire a better level of hospital coverage compared to younger consumers and may be reluctant to switch plans and/or insurers."

Health insurance expert Dermot Goode reckons the rip-off is costing even more than a few hundred euro. He says older people typically pay between €2,000 and €2,500 each. This is double what their younger counterparts pay. One of the problems is that those over the age of 60 are less likely to switch provider than younger people.

And older people are more likely to be unaware of the availability of corporate plans. The HIA has found that many people also mistakenly believe that age loadings may apply if they switch.

Younger to middle-aged people are more likely to shop around, and tend to pay between €900 and €1,500 per adult for cover.

The Economic and Social Research recently called on the HIA to engage in more targeted efforts to get older and sicker people to switch, as they are least likely to move provider.

But it requires more than that. The HIA, as the regulator of health insurance, should stop insurers segmenting the market to the disadvantage of older people. After all, this carry-on is contrary to the spirit of health insurance legislation.

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