Saturday 17 March 2018

VHI hikes prices again as 6,000 ditch health cover every month


Charlie Weston Personal Finance Editor

FAMILIES will end up paying out an extra €600 a year for health insurance after the VHI announced another hike.

It is the third rise in premium prices in just over a year.

And even more rises are on the way as the Government plans to charge health insurers every time a person with cover uses an accident and emergency unit in a public hospital.

Experts estimate this change in the rules could sent prices shooting up by at least 15pc, with the VHI recently warning that it may have to impose 50pc increases because of this change.

Legislation is to be introduced later this year to bring in this new system, which will cost insurers around €143m.

Yesterday, it was predicted that these relentless rises in health cover costs will force thousands more families to ditch private medical insurance.

Health Minister James Reilly said he was disappointed with the VHI hike of an average of 9pc.

He will be meeting with the three health insurers in the coming weeks to hammer out plans to cut costs in the private healthcare system.


Dr Reilly said he was told by the VHI that it would have had higher rises this time if it was not for the health insurance levy, a system where the VHI ends up getting compensated for having most of the older and more expensive customers.

Already some 6,000 people a month are dispensing with health insurance, putting an additional strain on the public system.

VHI said premium prices would rise by between 6pc and 12.5pc for those renewing from March onwards. It comes after rises of between 15pc and 45pc last February.

Now premiums at the state-owned insurer will go up again next month. This latest rise means some plans, particularly those popular with older people, will have jumped by 65pc in a 13-month period.

Plan B Options, which is now called HealthPlus Extra, will have risen by €658 for an adult in just over a year. It will now cost €1,644 for an individual on this plan.

And the cost of plans for families have shot up by almost a third in a little over a year.

The cost of insuring two adults and two children on the Parents and Kids plan will jump by 9pc to €2,820 a year from St Patrick's Day, a rise of €281. Last November, it jumped €331 -- meaning the cost of this plan will have risen by €612 for a family since January last year.

The One Plus plan, which the VHI said the majority of families have, will jump in price by 6pc to €2,250. Since the start of last year, the cost of this plan has risen by €430 a year for a family.

VHI boss Declan Moran defended the latest rises, insisting that the private health insurance business was loss-making and the market was contracting. He said the company's average claim per customer has increased since 2009, with growth in demand for healthcare being the most significant factor.

VHI said it spent €1.2bn in funding its customers' health needs last year and added that it has made savings of over €190m since 2009.

The VHI announcement is the latest in a number of increases in plans by private health insurers.

Aviva's health plans are increasing by 15pc this month. This will be the third rise in just over a year.

Quinn Insurance plans will go up by 6pc next month -- just weeks after hikes that took effect last month.

Health experts said the succession of premium rises will push more people out of the private insurance market.

Dermot Goode of said: "This latest increase adds to the probability of 100,000 consumers will allow their health insurance to lapse in 2012, forcing them to rely on the already creaking public system."

A total of 2.17 million people have private health insurance -- a fall of 123,000 since the downturn began.

Mr Goode advised all health insurance customers to review their cover before each renewal as there were still good deals in the market.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business