Tuesday 12 December 2017

Yes, more people are taking out health cover, but the recovery in the market is fragile

An extra 150,000 people bought health insurance in the past two years, says the Health Insurance Authority, the regulator. (Stock picture)
An extra 150,000 people bought health insurance in the past two years, says the Health Insurance Authority, the regulator. (Stock picture)
Charlie Weston

Charlie Weston

Good news tends to be in short supply when it comes to health insurance in this country. But there was some good cheer when it was revealed recently that the numbers taking out cover have shot up.

An extra 150,000 people bought health insurance in the past two years, says the Health Insurance Authority, the regulator.

More than two million people now have cover.

The jump has been put down to economic recovery and the introduction - two years ago this month - of late-entry penalties.

Almost 33,000 people between the ages of 40 and 49 joined a scheme since the start of 2015, the Health Insurance Authority (HIA) said.

They were prompted to take out cover to avoid levies that were imposed in May two years ago.

Known as lifetime community rating, the new system means anyone over the age of 34 who joined after May 2015 has had a loading imposed on their health insurance premium.

The loading works out at 2pc of the premium cost for every year the person is over the age of 34, if they have not had cover before.

The largest increase in those taking out cover was in the under-50 age category. This was the group targeted for lifetime community rating.

However, we would be wise not to get too carried away.

Yes, more than 6,000 people on average a month are now taking out health insurance.

But the market is still in delicate shape.

Many of those who have taken out cover in the last while have bought cheap, entry-level plans to avoid the loadings. The cover on these plans is poor.

We are still a long way off the market high of 2.3 million members in 2008. At the current pace of growth, it will take years for us to hit this level again, according to expert Dermot Goode of TotalHealthCover.ie.

Full recovery is being delayed by double-digit prices increases being imposed by insurers, the Government levy, public hospitals charging private patients and the threat to remove tax relief.

The largest increase in members appears to be in the 40 to 49-year-old age category.

It's good, but we need to see more members joining in the 25- to 39-year-old age category to give greater support to community rating.

We also need to see further initiatives from the Government to make it more attractive for new entrants to compete in the market, as we are now down to just three players.

We also need to see an end to the practice of charging patients in public hospitals for private services they don't receive.

Sunday Indo Business

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