People who tried to avoid age penalties ‘now paying more’ for health insurance
PEOPLE who took out health insurance to avoid age-related penalties have been warned they are now likely to be overpaying for their cover.
Some 100,000 people took out cover for the first time two years ago this month to avoid loadings.
But the premiums on the plans that many of these people took out have shot up, according to health insurance expert Dermot Goode, and these people now have an opportunity to get a better-value plan.
Mr Goode, of TotalHealthCover.ie, said half of those who took out cover before the deadline of April 30 in 2015 bought entry-level plans for themselves and their families.
From that date what is called lifetime community rating was introduced.
The system means anyone over the age of 34 who joined after May 2015 has had a loading imposed on their health insurance premium.
The loading works out at 2pc of the premium cost for every year the person is over the age of 34, if they have not had cover before.
A 44-year-old, for example, who is 10 years over the threshold, will have a 20pc loading on their premium.
Mr Goode said many of the entry-level plans bought by people to avoid the age-related penalties have now jumped in price.
“Our research indicates that many people don’t bother reviewing or switching their cover at renewal, so it’s very likely that the majority of these customers will continue to overpay,” he said.
He said there are huge savings to be made for younger members who mistakenly think they got good value two years ago.
“New plans are coming onstream almost monthly and other plans are being discounted from time to time, so people should always check the other options prior to renewal to ensure potential savings are not being missed,” he said.
Many people believe the entry-level plans they bought two years ago offer comprehensive health cover, but Mr Goode said this is not the case.
The insurers have had to strip everything possible from these plans to get the price down.
The plans only cover public hospitals with minimum benefits included for everything else, he said.
Mr Goode said people who bought cheap, entry-level plans need to consider plans at the next level.
He recommended Vhi’s One Plan 250, at €855 per adult. The Laya plan recommended is Essential Health 300, at €895, and he said Irish Life Health’s Benefit 2 Scheme, which costs €875 per adult and covers most public and private hospitals, was also a good option.