Charlie Weston: 'Don't help biggest beast in market make more profit by overpaying'
It was great while it lasted but the good days are over for people who have health insurance.
The biggest beast in the market, VHI , has now signalled that it has abandoned the price cuts it implemented over the last two years and is to push up premium rates from the start of August.
The semi-state, which has 1.1 million members, kicked off the price war and implemented three reductions between 2017 and now.
It said at the time that careful management of claims costs allowed it the leeway to decrease premiums.
The price cutting forced rivals Laya and Irish Life Health to match it with price reductions. But the game has now changed, VHI argues.
A spike in the number of members opting for expensive treatments in private hospitals and clinics has pushed up claims costs.
Higher costs for the latest medical treatments and rising consultants' fees were also cited by VHI as justifications for its premium hiking.
The upshot is families renewing from August can expect to pay an average of 6pc more for their cover, with some plans going up by 10pc. The average rise is twice those announced by Laya and Irish Life this summer.
A family with the popular One-Plus VHI plan can expect to pay an extra €344 from August. That is a hefty extra payment.
The cost of Health Plus Extra (old Plan B Options) will increase from €2,316 to €2,502 per adult. For a retired couple, this will add a further €370 to their annual bill.
For those on Health Plus Premium (old Plan D), this will increase from €3,175 to €3,495, which is a 10pc increase.
Some plans like the Health Plus Platinum (old Plan E) or the One Plan Starter (public hospital cover only) will remain unchanged or have a minimal increase.
Many people will point to the healthy profits made by VHI last year. It made not-insignificant after-tax profits of €82.4m in 2018.
The bad news is that there could be more premium rises this year, if the trend of greater claims continues. Consumers need to be careful and start shopping around well in advance of renewal.
By moving to more up-to-date corporate plans, significant savings are still possible, according to Dermot Goode of TotalHealthCover.ie.
There are hundreds of different plans on offer from the three players.
Remember, insurers almost always punish loyalty in the insurance market. VHI is profitable enough. You do not need to help it by overpaying.