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Families face €1,000 hit in shock VHI rise

HARD-pressed families were hit yesterday with price hikes of up to €1,000 a year for their VHI cover after the health insurer announced the biggest premium rises in its history.

VHI triggered a storm of fury -- at itself and at holidaying Health Minister Mary Harney -- after it said its popular Plan B premiums were to rise by up to 45pc from February.

The bombshell came as a savage blow to families and workers, and a massive exodus from the VHI to rival insurers is all but certain.

Thousands more families and pensioners are likely to drop their health cover altogether as a result of the unprecedented hikes, blamed on rising medical and hospital costs.

Around a third of VHI customers have some version of Plan B.

The blow comes after child benefit payments were slashed this week and workers are braced for severely depleted pay packets after December's €6bn package of tax rises and budget cuts.

The hike in Plan B Options will result in the premiums jumping by €444 a year for each adult. The rises take effect on February 1.

This will mean a family with two children will see their annual premium rocket by more than €1,000 a year.

As the hikes were announced and public anger mounted over overcrowding at A&E units, Ms Harney was away on holiday.

In a statement released later, she said there were "no easy solutions" and urged customers to shop around for better deals.

The VHI insisted families who have Plan B Options tended to put their children on a cheaper plan.

But the cost of insuring children, even if they are on lesser plans, is to jump by 15pc.

The price increases from VHI could add €600-plus for a typical family even on a reasonable plan, according to Ciaran Phelan of the Irish Brokers' Association.


VHI boss Jimmy Tolan insisted most people would see the cost of their healthcare plan rise by 15pc, but he admitted that more than a third of its customers were on versions of Plan B with hikes of between 35pc and 45pc.

The VHI, which has 1.3 million members, defended the massive rises.

But rival Aviva said VHI was operating without accountability. "Strong intervention by the Government is now an urgent requirement to prevent the VHI from continually penalising its most vulnerable customers with unaffordable increases while simultaneously ignoring the significant cost savings to be made by reforming the VHI," it said.

Under the price hikes, a family with two adults and two children on the Parents & Kids plan will see their premiums jump by €331 a year to €2,540.

But if the same family has the popular Plan B Options the annual premium will climb by almost €1,000 to €3,336, according to healthcare brokers. And the VHI warned of continuing rises as it said it would have no choice but to pass on further increases in the costs of a bed in a public hospital to its policy holders.

It complained that it had 280,000 people over the age of 60 on its books, with healthcare costs for older people a multiple of that for younger people.

Healthcare experts said up to 1,000 people a week were already giving up private insurance before Christmas.

Mr Tolan yesterday denied the huge premium hike was about making the VHI more attractive after the Government decided last year to prepare it for a sale.

"We are budgeting to break even and not fattening it up," he said.

Irish Independent