Business Personal Finance

Thursday 19 July 2018

Health Insurance Uncovered: Is it really worth having if you’re relatively young, fit and healthy?

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Louise Kelly

Louise Kelly

People in their 20s and 30s who believe they are too young to fork out for health insurance may lose out in the long run, according to experts.

These consumers may suffer if they don't consider the financial impact potential future injuries and illness may have - or if they attempt to procure cover after suffering an illness or injury.

"The business myth of it all is that a lot of young people think that they’re not going to get sick," Dermot Goode told

"What many don’t realise is that if they do get sick and have to go to the hospital, it’s not free as a public patient; it will cost €75 a night for up to 10 nights".

Mr Goode maintains that it is a matter of weighing up the cost of an annual spend of up to €850 on an insurance policy with the cover and price difference if you have no private care.

"If you spend €950 on average, you are taking out a decent insurance plan that will allow you treatment in the majority of hospitals, quickly." 

The rising cost of health insurance has been the subject of much discussion lately with an increase in people claiming that the higher rate of claims being paid, medical inflation (new drugs and treatments) and an aging demographic are all contributing towards the sky-high premiums. 

The chief executive of Irish Life Health Jim Dowdall has warned that the average annual cost of private health insurance is set to double to €2,400 over the next ten years.

According to the recent annual report from the Health Insurance Authority (HIA), the percentage of the insured population aged over 60 has increased by 0.8pc on an annual basis since 2009; standing at 21.3pc at the end of 2016.

Read more: 'Digital doctor is a major reason why health cover is worth the cost for us'

Naturally, one effect of the rising premiums is that younger people who are relatively fit and healthy may make the decision not to take out a plan because the financial burden, which in turn can have a damaging impact on the market as a whole.

But, according to Bonkers’ Mark Whelan, that’s not a compelling reason for a young person to take out cover.

"A better reason for a young person to take out cover is that they’ll be glad they did if they find themselves with an urgent need for treatment, as a result of a broken bone or sport-related injury for example," he said.

"Injuries like these can afflict active, young and otherwise-healthy people at any time.

"In many cases, people pay for private health cover to be in a position to skip the notoriously long waiting lists that exist in the public system."

Mr Goode said that a lot of sportspeople look to get health insurance after they break something – and a pre-existing injury just won’t be covered under a new policy.

"There are a lot of GAA players who regularly suffer sports injuries.  If they attend their local hospital at the weekend for treatment to a crucial ligament, they will get bandaged up and may not see a specialist for up to 6-8 months.

"If you have private health insurance, that specialist treatment could be done in around two weeks."

Read more: Health insurance rip-off: How people are paying €1,000 too much for cover

Another incentive that might appeal to those aged in their 20s and early 30s is that, if you are aged under 35 years old, a discount will apply to the health insurance policy simply by virtue of your age. After this, there is a 2pc loading for each year; so if you are 44 when you first take out a health insurance policy, then the cost is 20pc higher.

This loading factor was introduced when the Lifetime Community Rating (LCR) came into effect in May 2015.  According to the Health Insurance Authority (HIA), a total of €2.4m in LCR loadings were paid last year.

The confusion looking at policies for the first time is understandable, Mr Whelan said, as with over 370 different plans on the Irish market, "it’s virtually impossible for consumers to compare plans like-for-like."

"Since some health insurance providers don’t pay commission for new business, not all brokers provide a full-market comparison," he said.

"With this in mind, consumers should always ask their broker if they’re going to consider every single option out there before making a recommendation."

While a lot of young people want to solve the health insurance problem over the phone in five minutes, Mr Goode said that a good broker will talk to a client for 30 minutes before suggesting a plan.

"If someone is buying on cost alone, and if you have €900 to spend on the cover, then having a detailed conversation is not wholly relevant. But making the cover to the person is essential – and it’s best not to let a representative off the phone until you’ve asked for all the available options".

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