Friday 24 November 2017

Leo's lapse and a generation forced to run for cover

As minister Leo Varadkar remembers to renew his health insurance, Sarah Caden says his peers will pay up only out of fear

Information: Health Minister Leo Varadkar and Don Gallagher, CEO of the Health Insurance Authority at the launch last month of a Public Information Campaign on the introduction of Lifetime Community Rating to the health insurance market.
Information: Health Minister Leo Varadkar and Don Gallagher, CEO of the Health Insurance Authority at the launch last month of a Public Information Campaign on the introduction of Lifetime Community Rating to the health insurance market.

Sarah Caden

Last week, a week before the lifetime community rating deadline, Leo Varadkar (36) admitted that he'd only just taken out a policy himself. His had lapsed for a "few years", he said, while adding that he felt "much better" after taking it out again.

Leo didn't explain whether he meant healthier or less bothered by that little voice a lot of thirtysomethings will be familiar with, which says: "God, I really should get around to that some time." But then, it was probably more than a little voice for Leo, what with him being the minister bringing in the lifetime community rating (LCR) and all.

It was last summer, around the time that Leo Varadkar became Minister for Health, that we first started to hear about lifetime community rating as a Government proposal to get young people into the health insurance system. With customers dropping their insurance in droves because they could no longer afford insurance, and young people failing to believe that they needed it, the structure of the system was threatening to collapse.

If younger people, who don't tend to get sick, don't pay in, then who's going to pay for the pesky older people, who get sick more and cost more? And we'll all be those pesky people one day, if we're lucky, but no one believes that when they're young.

Just like Leo, who surely was reminded to renew his policy every time he instructed his fellow thirtysomethings that health insurance is a very good idea.

Or maybe, as can happen, Leo thought he'd renewed it. Or maybe he hadn't taken up the baton when his parents had dropped him from their policy, which is the case with more thirtysomethings than would care to admit it. Not to mention those many thirtysomethings who are still on their parents' policies.

Until now, the young people of Ireland have been winging it with health insurance. For many, it was a can being kicked down the road for when they were older, or earning more. For others, it was a pointless waste of money and then, of course, there was a portion of the younger generation who have continued being bankrolled by mum and dad well into adulthood.

Some even sailed through antenatal care, childbirth and even their children's first years on their middle-aged parents' policies. Mum and dad didn't seem to mind and it even made them feel better - possibly even improving their health as consequence - to know that their adult kids were covered.

And then, often, once the parents dropped them, those adults were often put off by the cost of insurance or convinced themselves that nothing bad would happen to them.

So, something had to be done to get them back in, even if there's some doubt as to whether those being drawn in will really benefit from what they're buying. In some ways, what is being traded is one fear for another.

The old fear, that didn't work on the modern young, was the fear that they'd get sick and fall on the mercy of the dreaded public system. The new fear, under LCR, is that if you don't pay now, you'll end up paying more later, as every new policy taker will pay a 2pc loading on their price for every year they are over the age of 35.

Our parents took out health insurance on the basis that it would secure the best standard of care. You'd be able to skip waiting lists for doctors and procedures and you'd get a nice bed and the best of everything. That was in another time, however.

Recently, consultant ophthamologist Professor Michael O'Keeffe, who works in both the public and private service, warned that many of the new, good-value, entry-level policies being offered were hardly worth the paper they're written on. O'Keeffe explained that, increasingly, people were buying schemes that don't offer half the benefits the buyer imagines. The cheaper schemes, he argued, don't provide the traditional two-tier care that promises queue jumping and priority for procedures, and will likely put further pressure on an already strained public service.

The truth is that as people sign up before Wednesday to beat the deadline, a great deal of them are going to go for the cheapest policy they can get, regardless of the general advice that anything under €800 per adult per year is a poor choice. Because they're buying out of fear of penalty, not fear of ill health. They're buying with budget in mind, not out of thinking more about their health or about ageing.

So they'll go cheap and they'll hope for the best. And, from a health point of view, they'll square this with themselves by reminding themselves that getting sick is something that only happens to old people.

If the thirtysomethings choose to go cheap and go for policies that really won't repay them anything, however, then is what they're doing really buying into to a long-term savings scheme? They're buying into the cycle. You buy this now and keep the cycle going and when you get old there'll be money there for you.

But don't expect to see any payback for a long time, not on the policies we've managed to scare you into buying now. Scared you with the threat of taking yet more money from you, which seems to be the only way to get younger people to buy into private health insurance.

No doubt, thousands of mid-thirtysomethings will buy in before Wednesday's deadline, while a surprising number will likely kick that can down the road a little further before they succumb.

After all, being on the parents' policy counts as being in, and there are plenty more years left in that pair, what with the great health care they have.

Sunday Independent

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