Rivals ready to cut health insurance rates as Vhi kicks off new price war
RIVALS of Vhi are ready to cut their prices in response to dramatic reductions in premiums announced by the company in the past few weeks.
A leading health insurance expert said lower premiums across a range of Vhi plans took effect from the start of this month.
This will prompt a quick response from competitors Laya Healthcare and Irish Life Health, said Dermot Goode of TotalHealthCover.ie. He said the price-cutting was in contrast to previous years when rises tended to be the dominant theme at this time of year.
The Vhi reductions range from €84 to €388 for a family of two adults and two children.
This amounts to reductions of between 3pc and 7pc, and comes after years of health insurers announcing multiple rises each year.
"Based on past experience, we are anticipating a quick reaction from the likes of Irish Life Health and Laya Healthcare, as they will want to protect their existing customer base, while continuing to attract new members," Mr Goode said.
Irish Life Health has already announced some price reductions on its entry level plans from April 1 next, as its passes on the recent reduction in the health insurance levy.
At the end of last year the Government decided to lower the levy on basic policies.
The non-advanced plans cover the cost of treatment in a public hospital only, with no access to private medical treatment.
Average price reductions would be €45 on the adult gross rate and €15 for the child gross rate on selected plans, Irish Life Health said.
Health Minister Simon Harris secured agreement from Cabinet to decrease the State levy payable on non-advanced plans favoured by young people.
And Irish Life Health reversed some price increases introduced from the start of the year, which saw several popular corporate plans reduce in price from the start of this month.
Its popular Health Plan 16.1 reduced by 11pc, as will plans such as Be Fit 2 and Health Plan 13.
Laya Healthcare has announced an expansion of its free cover offer for children under 18, also from April 1. The offer will apply on seven plans.
But Mr Goode said there would be further cuts.
"My advice would be to watch this space as there will undoubtedly be a reaction from the other insurers. This is the closest we've ever been to a real price war in health insurance and it is long overdue," he said.
The Vhi cuts will mean a retired couple on the old Plan D (Health Plus Premium) will save €634 for the year. The same couple on the popular Health Plus Extra (old Plan B Options) will save €320 for the year.
Those with children under 18 can save €154 per child by splitting the family cover and move their children to the Vhi Parent & Kids Excess scheme, Mr Goode said.
He said that for consumers this means there will never be a better time to consider buying health insurance or at the very least shop around for better deals, even if you want to stay with the same insurer.