Lifestyle Health

Sunday 18 February 2018

Two million who place premium on health cover can't be wrong

Health insurance: costs ever rising
Health insurance: costs ever rising
Charlie Weston

Charlie Weston

IT is hard not to conclude that there is a concerted effort to undermine health insurance from a number of quarters.

We dearly love our health insurance. Two million people have cover, with a total of €2bn paid in premiums every year.

This amounts to half of the population – a figure that is extraordinary high by international standards.

And many people are deeply attached to their cover. A recent survey by Cornmarket Financial Services found that 36 per cent of people will not give up their insurance – no matter how high the premiums go.

But despite all this, the system is in crisis.

The dysfunctional nature of it can be gleaned from the fact that already this year we have had six increases in premiums from the four providers.

It now costs between €1,200 and €1,500 per adult for a standard policy that will get you a semi-private room in a private hospital. That is almost double the premium for the same benefits before the economy blew up in 2007.

The list of culprits for this state of affairs is long.

An unregulated VHI must take some of the blame. It is the largest market player so gets to set the prices paid in private hospitals that the others must follow. It has had some horrendous premium hikes in the past few years.

Laya, Aviva and Glo are also guilty of more recently pushing through super premium hikes.

The Government seems hell bent on undermining health insurance as a product. Its decisions to heavily restrict the tax relief on policies, and to push enormous costs on insurers for people who only get a public bed in a public hospital, is responsible for some of the large premium rises.

The present system is clearly not working. But the alternative looks worse.

Health Minister James Reilly's plans for universal health insurance (UHI) will lead to a situation where everyone will be forced to take out cover.

But there will no longer be any option to get preferential treatment for those with more than the basic policy.

Older people will end up paying more for supplementary cover, as this will be priced on risk.

And the tax reliefs will be abolished entirely. That will add another €200 to the cost of every adult policy.

What is needed is radical reform of the current system. Much could be done to relieve the pressure on premiums, such as forcing those who leave it late in life to take out cover to pay more.

The present system is not working, and the alternative looking like an unaffordable and bureaucratic nightmare.

It is time the Government took notice of the two million health subscribers really want, and stopped telling us what it thinks we need.

Twitter: @Cweston_Indo

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