Shop around to save a fortune on health insurance
The VHI slashed the cost of health cover this week. It cut child and student prices by 50% on its in-patient plans. A family with two children on the One Plan, for example, will save €268. The drop will be €413 for a child and student on the Parents And Kids Plan.
That’s a nice saving for those who renew or buy VHI policies after July 1 and before October 31.
But savvy customers can save several times more just by doing a bit of homework.
There’s a wide variation in the price of health cover because companies are constantly churning out new plans to attract younger (less costly) customers.
This factor has seen the number of plans on the market increase to around 300. Older plans have older customers and tend to be less attractive than newer ones aimed at the young.
A classic example is Laya’s Health-Manager plan, which was highly recommended at its launch many years ago.
But successive price increases have pushed up the annual premium to €3,907. This is more than twice the price of a similar plan from the same company, says health insurance consultant Dermot Goode of brokers Cornmarket.
Laya’s Total Health Select, for example, costs just €1,653 – less than half the price of Health Manager.
Yet it provides superior cover in many ways without several of the ‘excesses’ (the amount you have to pay out of your own pocket before the insurance takes effect) applied to the latter.
Goode says: ‘If you haven’t reviewed your cover, you’re probably paying too much. That plan you were on a few years ago has had 20 price increases since you took it out.’
A classic way to pay too much for health cover is to put everyone in the family on the same plan.
With a little thought, you could tailor your policy to suit your needs. For example, use money saved on buying lesser cover for healthy adults to splash out on the best for anyone in the family with health issues.
You should also take advantage of promotions aimed at younger customers. GloHealth offers free cover to children under three in order to appeal to their probably healthy and young, parents. And it works. According to Goode, this offer makes their plans a nobrainer for anyone with a very young family.
Another example is the near-€1,500 you could save by ‘trading down’ from VHI’s HealthPlus Platinum to the same company’s HealthPlus Premium. (These were formerly known as Plan E and Plan D respectively.)
You only lose out on getting a private room in certain high-tech hospitals, some of which are even being phased out anyway.
But the cheaper plan even provides better cover in some ways, such as €70 per day for convalescence compared to €64 with the Platinum version.
You can compare these and all other plans on the Health Insurance Authority’s website, hia.ie. This is very user-friendly and not only provides a list of plans but also enables you to compare them feature-by-feature.
Another option is to go to a broker. (Broker commission is usually paid by the insurer, not you.)
The big question is, will health cover costs start to come down from here? A big decrease seems unlikely.
Health insurers remain under financial pressure after so many people dropped out of the system during the financial crash.
The latest figures show just 40% of Irish adults now have cover, compared to 49% in 2007. Most of those who drop out are younger customers, leaving an evershrinking pool of more claims-prone older people.
But the era of savage increases may be coming to an end. As more people return to work, policy sales should rise, taking some of the pressure off insurers.
The latest VHI move highlights the benefits of competition. It will probably trigger a response from its three rivals. Aviva, for example, is about to launch some special offers in July and these may well be enhanced now with better deals for children.