Thousands will give up their health cover if premiums keep rising
THOUSANDS of people will give up their health insurance if premiums keep rising at the current rate.
Since the start of the year there have been six separate rises in health insurance premiums, with some policies going up by 40pc.
People with private medical insurance have also been hit with a cap on the tax relief that each policy gets. This has added up to €350 to the cost of insuring a family.
Now a new survey, seen by the Irish Independent, has predicted that up to 226,000 people will ditch their cover if the rates keep rising to the same extent.
This would have drastic implications for the health insurance market, the survey by Cornmarket Financial Services found.
Dermot Goode of Cornmarket said there was limited tolerance for further hikes. The cost of health insurance has doubled since 2007, due to higher levels of claims, rising medical inflation and government policy decisions, he said.
The survey found that 11pc of people with health insurance would have no option but to cancel if premiums keep rising by 10pc to 20pc a year.
This works out at 225,750 people, as 2.05 million people have medical insurance in this country, according to the Health Insurance Authority.
Mr Goode said: "Given the latest price hikes, there is a strong likelihood that these statistics could become a reality, which is bad news for all consumers."
Aviva said last week that it was raising premiums by an average of 13pc from next month, but some are going up by 20pc. The rises will mean an extra €700 in costs for a typical family.
It is the second Aviva rise this year, and follows two rises from GloHealth, one from VHI and rises of up to 40pc from Laya.
The Cornmarket survey found half of all those with health insurance said they would move down to the lowest level of cover if double-digit premium increases continued.
But more than one-third of people felt that health cover was so important to them that they would never cancel it.
Consumers are reacting to the severe rises in the cost of cover by switching from one provider to another, or changing polices but staying with the same insurer.
More than a quarter of consumers said they had switched policies or providers in the last year. But almost nine out of 10 plan to switch this year in a bid to get a better deal.
"Most customers want to retain all or most of their current benefits, while substantially cutting the cost of the renewal bill they've just received," Mr Goode added.