Friday 19 January 2018

The clock ticks down for over-35s - so what are your options now?

From May 1, anyone aged 35 taking out health insurance as a new member will have to pay a permanent age loading
From May 1, anyone aged 35 taking out health insurance as a new member will have to pay a permanent age loading

Q: What is going on? A: From next week if you are over the age of 35 and do not have health insurance it could cost you a lot of money to buy it.

Q: What?

A: At present, everyone is charged the exact same regardless of age, gender or medical history.

This is called community rating. But the Government has decided to change the rules, and from May 1, anyone aged 35 taking out health insurance as a new member will have to pay a permanent age loading.

This means the older you are, the more you pay. This amounts to a 2pc loading on the premium for every year you are over the age of 35.

So a 42 year old who takes out health insurance for the first time will end up paying 16pc on top of the cost of the premium. This could work out at an extra €160 on a €1,000 premium.

Q: Why is this change being introduced?

A: Some two million people have health insurance, but the age profile is skewed. Far more of the over 50s have health cover than those in their 30s and 40s.

Encouraging more young people to join the market - some would say penalising them if they do not join - is a way to spread the costs of older and less healthy people across the market, helping to support affordable premium levels for all.

Q: That is hardly fair?

A: There is a strong case for arguing that this is not fair. Private insurance creates a two-tier system and allows queue skipping.

But the Department of Health points out that private health insurance is optional.

The department says this means "you do not have to take out private health insurance in order to have access to high quality hospital services".

However, there are some 400,000 on waiting lists for treatment in the public system.

Q: Gosh, these loadings are severe. Is there anything to soften the blow?

A: It is worth noting is the fact that if you previously had cover, your loading will be reduced by the relevant number of years.

You will be credited for years that you previously had health insurance.

And people who lost their jobs should note that provision is made for a credited period (not more than three years) for people who previously had health insurance, but who stopped paying since January 2008 because of unemployment.

For anyone coming, or coming back, to Ireland, a nine-month grace period will apply. Within that period, a person won't have to pay a loading if health insurance is taken out.

Q: What if I switch to another insurer?

A: This doesn't affect the loading that applies to you. In addition, periods of up to 13 weeks without cover are allowed without affecting your loading.

Q: Will I have to pay a loading for the rest of my life if I continue to maintain my private health insurance cover?

A: The loading that applies when someone buys private health insurance after the 1 May 2015 will apply in later years.

Q: Low-cost plans have been introduced, but are they any good?

A: All four insurers have introduced new cheap, entry-level plans. Some cost less than €400 a year for an adult.

But these are not good quality plans.

Most only cover public hospitals, and not private hospitals and clinics.

Also, with the GloHealth Base Lite plan you pay the hospital if you have a procedure done and then claim back the costs from the insurer.

Insurers have stripped everything possible off these plans to make them affordable. If you want good quality cover you will need to pay at least €800 a year.

Q: The Government has promised to introduce universal health insurance. Surely, I won't need private health insurance?

A: Plans to introduce universal health insurance are still part of official Government policy, but many experts feel it could be 10 years off, as it is set to be expensive.

It would aim to eliminate the current two-tier system of public and private medicine and to end the practice of queue-jumping for treatment.

It would be mandatory for all to have cover for a basic package of services from one of a number of different insurers.

The State would pay the premium for low income groups and provide subsidies for others.

People who refused to take out cover would have it provided for them, with the cost deducted at source from their earnings or benefits.

Irish Independent

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