Saturday 21 September 2019

Charlie Weston: 'Insurers have long known how to circumvent rules - and the situation is getting worse'

  

Dermot Goode: Older people seeing largest price rises
Dermot Goode: Older people seeing largest price rises
Charlie Weston

Charlie Weston

Health insurers are not supposed to price discriminate on the basis of age. That is the law.

However, that the elderly pay more than young people for the security of having health insurance has long been acknowledged by the regulator for the sector, the Health Insurance Authority (HIA).

Over 60s pay on average 30pc more for their cover than younger people, it has calculated.

This flies in the face of Government policy, underpinned by law. We have what is called community rating which bans companies from penalising those who are most likely to claim - the elderly and the ill.

In theory, this means every plan from all the health insurers is available to anyone who asks for it and can afford it, irrespective of their age and allowing for the likes of a waiting period if they have a pre-existing condition. But health insurers have long known how to get around this.

They charge more for policies that fully cover the procedures that are most likely to be availed of by older people.

This means the best-value plans are often not an option for those over the age of 60.

The HIA wrote in its recent annual report: "Older consumers are likely to have a greater requirement for full orthopaedic cover, which was only available with more expensive policies in two of the three open-enrolment insurers at the end of 2018."

In other words, to get full cover for the likes of hip replacements, which older people need, requires them to buy the dearest policies, or switch insurer, which many are afraid to do.

And the situation is getting worse.

Health insurers are imposing the highest price rises on the plans they know are bought by the elderly, and they are restricting cover on the cheaper plans.

Vhi, Laya and Irish Life Health restrict orthopaedic cover on the plans that are the best value. This means they will only cover 80pc of the cost of a hip replacement in a private hospital.

Alternatively, their good-value plans require a co-payment, which could mean shelling out €2,000 to get the procedure carried out.

Another problem is that older people tend to be on outdated, expensive plans that are getting dearer and dearer.

Health insurers also know older people are the least likely to seek out a better-value plan, and will most likely renew on the scheme they have had for donkey's years.

The latest round of price hikes has exacerbated the situation leading to accusations that insurers are discriminating against older members.

In the last three months Vhi, Laya and Irish Life Health have imposed price rises averaging between 3pc and 6pc.

But when you drill down into the numbers, as Dermot Goode of TotalHealthCover.ie has done, it emerges the very plans the elderly tend to buy have seen price rises of double that percentage.

Take an older couple on the popular Health Plus Extra, which used to be called Plan B Options.

They are going to have to pay an extra €370 a year to renew on this scheme, an analysis by Mr Goode shows. The increases for a younger couple on a better-value plan are coming in typically at under €200.

Insurers deny discrimination against older people by targeting plans favoured by them for the highest rises, Vhi, Laya and Irish Life all denied this was the case.

But the reality is that the over 60s get a raw deal.

The bottom line is that the families of older people need to sit down with them, help them seek out better-value cover, and persuade them to switch to a more keenly priced plan. This is possible while retaining cover for the likes of hip surgery.

The alternative of the over 60s just renewing on the same plan means they are on a hiding to nothing.

Irish Independent

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