Cost of health cover to rise by €600 per year
HEALTH premiums are set to rise by up to €600 a year for a typical family, a shocking new report predicts.
The pressure on premiums is coming from thousands of younger people ditching their cover, while older people are joining the healthcare system.
Costs of claims for a 70-year-old are 10 times those of someone in their 20s. Yet both people will pay the same if they have the same level of cover.
The rapidly ageing nature of private health insurance, combined with government plans to charge anyone with insurance for using a public hospital, will send premiums shooting up, according to a report prepared by economist Colm McCarthy for Aviva.
Charging insured people for a public bed and the fact that the young are getting out of the market will mean premium rises of between 20pc and 25pc, the economist said.
Typical family policies, for two adults and two children, now cost €2,500 a year. A rise of 25pc would take the cost to over €3,000. Health insurance premiums have more than doubled since 2007.
And Mr McCarthy predicted that thousands more young people are set to leave the market. This because of unemployment, emigration and mortgage repayment pressures.
"There will be further premium increases even if there are no cost increases. This comes on top of big premium increases in the last few years," Mr McCarthy said.
Legislation is to be enacted in July to charge all those with health insurance for using public hospitals. This will mean charges of up to €1,000 a night even if the person only gets a public bed.
These charges on insurers would be passed on to consumers.
The Government hopes to raise €60m this year from the move to charge insurers for anyone with cover who uses a public hospital. In a full year, €250m is expected to be raised.
Mr McCarthy said this move alone would add 13pc to the cost of the average premium.
The rapid ageing of the insured population will add the same again to the cost of health cover.
In the last five years, 194,000 people under the age of 39 have given up health insurance.
But over the same period, an extra 52,000 people over the age of 60 have taken out health insurance.
Mr McCarthy said the loss of so many younger people from the market was destabilising it and putting the viability of private health insurance at risk.
Overall, 200,000 people left the market since the bust in 2008.
This will make it more difficult for the Government to introduce universal health insurance by 2016. Under that system, the State will pay for health premiums for those who are unemployed and on low incomes. And those who pay for health cover will be expected to continue to pay under universal health insurance.
If there are fewer people paying for health cover, it will be harder to finance a universal system, Mr McCarthy said.