Health insurers 'manipulating' market with plans elderly don't want
HEALTH insurance companies are luring young people with cheaper plans that are unattractive to older age groups.
A report by the health insurance watchdog revealed insurers were marketing less expensive plans, at up to €250 cheaper, to lower-risk groups. This suggests that companies are still manipulating the market despite a commitment that nobody should be penalised on grounds of age or illness.
The Health Insurance Authority (HIA), which regulates the industry, says the menu of care options available is not sufficiently attractive to older age groups.
Many of the less costly plans have reduced orthopaedic and opthalmic benefits in private hospitals, which would not suit older people more likely to need cover for procedures such as hip operations.
The HIA said this kind of manipulation to select profitable business was undermining community rating, the system that ensures older subscribers are not financially penalised on the grounds of age or illness.
However, there is less of a price difference between long-established products from the insurers, although those offering limited maternity cover are significantly cheaper.
The report also noted that from July 2011 to July 2012, the number of people aged 18-29 with private health insurance fell from 267,720 to 241,221 – a drop of 10pc.
"This trend has been evident for a number of years," it noted.
"The Health Insurance Authority calls on the department to mitigate the risk of this happening by allowing companies to charge higher premiums to people who only choose to take out health insurance later in life."
It goes on to suggest that additional loading costs should apply to anyone who takes out insurance after the age of 30.
This, it warns, should not penalise older people who have had health insurance for decades, but would mean more expense for those who only decide to avail of it when they are older. The report also points out that companies are allowed to offer full-time, dependent students between the age of 18 and 23 discounted premiums and that this could be extended.
"Insurers normally give the discounts to those aged 18-21. But to incentivise young adults to take out insurance in their own right, insurers should be allowed the option of charging adults aged 18-29 discounted adult rates," it says.
The report also said that in the year to June 2012, the number of people who cancelled their insurance cover increased to 60,000.
Most of the decline was in VHI membership, which fell by 52,000, predominantly among younger age groups.