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Cheap health insurance can hang you out to dry


Illustration by Tom Halliday

Illustration by Tom Halliday

Illustration by Tom Halliday

Private health insurance could become even more expensive after it emerged last week that hospital managers have been told to bill patients with private cover for a public bed - even if those patients end up on a trolley in a corridor.

Almost 300,000 people have already been forced to cancel their private health insurance since the recession hit in 2008. Many of those who still have insurance have slashed their cover rather than ditch it entirely.

The cost of private health insurance could rise by 8pc next year - notwithstanding any increases which follow the move to charge private patients for a public bed or trolley, according to Dermot Goode, health analyst with the health insurance website, www.totalhealthcover.ie.

"Medical inflation runs at 8pc, so there's probably an 8pc increase in private health insurance coming down the line," said Mr Goode. "If the HSE insists on charging private patients for public beds and trolleys, there will be an extra charge added on to that - but what that will be is anyone's guess."

To some extent, insurers have already factored this charge for public beds into premiums. Private patients who are admitted to a public bed in a public hospital have been liable for an overnight charge of €813 or €1,000 since the start of this year. However, it appears that not all hospitals have been charging private patients those rates - or have been charging incorrectly. The recent move to ensure they do so even if they are treated on a trolley or recliner is something which insurers didn't anticipate or budget for, said Mr Goode.

The bulk of people renew their health insurance in January, February and March. As insurers must give four weeks' notice of any price increase, the first inkling we will have of the private health insurance price hikes on the cards will be early December.

Many of us with private health insurance will have no choice but to downgrade our cover when the next bout of price hikes hit.

However, it's important to know exactly what you are walking into before you slash your cover to save money. Otherwise, you could end up with little or no cover for surgery or treatment which you previously didn't have to foot the bill for. Furthermore, any savings you make when downgrading cover could be easily wiped out should you have to go to hospital.

"A lot of people are signing up to low cost, high-excess plans so they can save money on their private health insurance," said Mr Goode.

The excess is the first part of a claim which you must foot the bill for yourself. Some health insurance plans have excesses which are as high as €600. This is as much as four times higher than the typical excesses paid on health insurance plans. Some plans have no excess at all. The trouble with high-excess plans is that you could face a bill of as much as €1,200 or more if you're admitted to a private hospital more than once a year. This could put you off going to a private hospital for treatment - even though you have private health insurance.

"Consumers need to understand what they're buying into with high-excess plans and what they're losing by way of cover in return for the savings," said Mr Goode. "Many of the cheaper plans are network plans that don't cover all public and private hospitals. What if you're referred to a private hospital that's not covered at all by your plan?"

Some of the cheapest private health insurance plans include Laya Healthcare's Advantage 500 Explore - which costs €560 a year for an adult; Glo Health's Net Most 500 (€660 a year); Aviva's First Focus 500 (€665 a year) and VHI Healthcare's One Plan 500 (€690 a year).

"High-excess plans pass a significant level of risk onto the consumer," said Mr Goode. "Most carry an excess of €500 for each overnight admission to private hospitals. Some (though not all) charge this excess for day-case procedures as well. So two admissions to a private hospital over a year could completely wipe out the savings you made switching to a high-excess plan."

Laya's Advantage 500 Explore plan for example has no cover for Blackrock Clinic, the Mater Private Hospital or the Beacon Hospital. The plan has a €500 excess for treatment in a private hospital. Furthermore, you are not covered for the first €200 of accommodation costs a night in certain private hospitals - which means you could have to pay a €200 charge for each night you stay in private hospital, depending on the hospital.

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With VHI's One Plan 500, you pay the first €500 towards most private hospital claims.

Aviva's First Focus 500 plan has a €500 excess per claim for treatment in a private or high-tech hospital as well as a €2,000 co-payment on certain cardiac and orthopaedic procedures. (Co-payments arise when your insurer won't foot the entire cost of certain procedures - which usually leaves you to cough up a couple of thousand euro).

Glo's Net Most 500 plan has a €2,000 co-payment on certain orthopaedic procedures.

Another thing which could catch you out when you downgrade your cover is the upgrade rule - if you later decide that the cheaper cover is not enough and that you need better insurance. Under the rule, you must wait two years before you are covered for any medical condition you have at the time you upgrade your cover - or five years if you are over 65.

"It's bad enough to find out halfway through your insurance year that you're on the wrong plan, but worse to learn that you'll be stuck with the cover on this plan for a further two years from your next renewal date for existing medical conditions - even if you change to a higher plan and pay a higher premium," said Mr Goode. "Imagine you're on a plan with a €500 excess. You sustain a back problem and you're admitted to a private hospital for minor back surgery and you pay the €500 excess yourself. The nature of a back complaint is that it's likely to reoccur, so you decide to upgrade your cover to a plan with no inpatient (when you stay in a hospital overnight) excess. Your premium triples as these plans are very expensive."

Despite paying three times as much for the new insurance, you will have to wait two years before you are covered for back treatment (or five years if over 65) - because of the upgrade rule.

It is possible to save money on private health insurance without hanging yourself out to dry. Do your research and pick a plan which offers cover similar (yet cheaper) to what you already have. Otherwise, your hospital bill could send you back to your sick bed.

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