Charlie Weston:
Insurance price wars are over – the era of rising premiums is back
MANY people who have health insurance received rebates earlier this year – a fact that may have lulled them into a false sense of security.
How these rebates were paid varied. Some insurers sent cheques while others applied discounts to premiums.
These rebates were paid to customers in order to recognise that for three months earlier in the year, the State took over most of the private hospitals and clinics as there was a fear a surge in Covid cases would overwhelm public hospitals.
This effectively closed off private facilities to health insurance customers and saved money for the Vhi, Laya and Irish Life Health.
The fact that the private hospitals were out of use for those with health insurance meant that a backlog of cases had to be dealt with once they resumed operating.
This has sent health insurance claims way up, while the expense of private hospitals testing incoming patients for Covid-19 has also added to the costs for health insurers.
The upshot of all of this is that the price war, which saw competition among the three insurers to cut premium costs, is well and truly over.
We are back to a situation of premiums going back up.
Many may not have noticed this because the price rises we have seen over the last year have been imperceptible.
But a 3pc rise here and a few 4pc increases there soon add up.
The bottom line is that many of the million people with health insurance who are renewing in the next couple of weeks are likely to be hit with increases of around 10pc if they renew on the same plans.
And some plans are being withdrawn, to be replaced by more expensive ones.
Worth watching too is the fact that benefits are being cut on some schemes.
Vhi is reducing psychiatric cover on a number of its plans, while Laya is introducing co-payments on some plans. This will mean costs of between €2,000 and €3,000 for procedures such as hip, knee and shoulder replacements.
In some cases, the insurers are trying to price customers out of certain plans. A premium hike is the quickest way of doing it.
But with more than 300 different plans on offer there is usually another, similar plan which is cheaper.
This means that it is critical that you review your cover before you renew, according to Dermot Goode of TotalHealthCover.ie.
You should start the review process well in advance to give yourself plenty of time to consider all options.
Find out the name of your current plan and how much your renewal premium is and decide what your budget is for health cover.
Visit the Health Information Authority’s website, hia.ie, and use its comparison facility to compare your current plan with others on the market.
Ask each insurer: “What is your very best plan for my budget and please include all your corporate plans.”
If you are not up to doing the leg work yourself, then talk to a broker.
And remember, automatically renewing on your existing plan is likely to mean you will end up paying too much.
There is usually a similar plan on offer which is cheaper