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No-frills plans to push down health prices

NEW no-frills health insurance policies are expected to drive down prices, benefiting thousands of families.

A range of stripped-down plans with reduced premiums will be on offer in a bid to stem the flow of customers giving up medical cover.

After five years of steep price rises, it is hoped the new packages will offer a chance for many cash-strapped families to retain their policies.


But the cut-price health plans being offered by insurance giants, including Aviva and VHI, will come at a cost in terms of the number of hospitals covered, with some procedures requiring extra payment from the patient.

The move to introduce new plans that restrict the use of some hospitals is also an attempt to short-circuit plans by the Health Minister James Reilly.

The minister intends to charge insurers every time their customers use a bed in a public hospital.

Insurance giant Aviva was to kick off the price war today by launching a range of new cut-price plans.

They are mainly aimed at younger families that have been forced to drop out of the market due to escalating premiums.

Some 200,000 people have dropped out of the market in the past five years, with most of these under the age of 40.

Experts said the move by the third biggest player in the market would stem this tide, and spark a price war.

But they warned that the new plans will not suit people with health issues, as they will be forced to make a contribution towards some procedures.

The new cheaper plans come after each of the four health insurers imposed price hikes in the past six months.

Overall, the cost of the average premium jumped by 45pc to more than €1,000 since 2008.

Aviva's new plans will cover both private and public hospitals. However, not all hospitals will be covered. And consumers will have to make part payments themselves for some procedures. But the main new plan is up to 20pc cheaper than similar plans.


The move by insurers to cover only treatment at hospitals offering good value for procedures is set to herald a huge shake-up in the market. Insurers will refine and adapt their plans to ensure they can offer better value to consumers.

Medical insurance experts said rivals VHI, Laya and Glo Health are set to mimic Aviva with the launch of new stripped-down plans that are cheaper than those already available.

Insurers are also opposed to plans by the Health Minister to charge insurers up to €1,122 a night in a public hospital even if the policy holder only gets a public bed.