Forcing us to buy health insurance we can’t afford could be the nextstep

As the water charge protests drag on, a massive change in health insurance that could cost you dearly has slipped in relatively unnoticed.

From May 1, health insurance will be age-loaded for those who don’t have cover already (the insurers call this Lifetime Community Rating, or LCR).

You will pay 2% extra for every year over 34, which can tot up to quite a tidy sum if you’re getting on a bit.

The maximum loading is 70%, which applies at age 69.

A couple aged 69 now have to pay over €3,000 for a half decent health policy. If they start taking out health cover for the first time after May 1, that would jump to well over €5,000.

A 50-year-old taking out cover for the first time will have to pay nearly a third more for what is already pretty expensive cover. And that loading will apply for the rest of his or her life.

How is the Government getting away with discarding one of the most prized, if controversial, principles of health insurance, i.e. that you are not penalised for growing old?

Have people been too busy protesting about a €160 water charge to notice a measure that could make health cover unaffordable for many? Other reasons that it has avoided a backlash thus far include:

1. It doesn’t apply to under-35s or people who have cover already (and keep it up to May 1). Isn’t this the classic Irish way to bring in unpalatable measures? We’re all right, Jack – only the newbies will suffer.

2. There are some sensible exemptions, e.g. for previous years of cover, periods of unemployment and for immigrants or returning emigrants.

3. Like sometimes-brutal GAA games used to be described, it’s tough-but-fair play. The old system had all ages paying the same, so the young subsidised the old. Was it fair that you could pay no health cover until you get old and could then buy it at a much-reduced rate?

Those younger people, understandably and increasingly, often chose not to buy cover at all, creating an imbalance in the system that has now been corrected.

The new regime also transforms the future finances of insurers at a stroke as they won’t have to worry so much about an ageing customer base.

Either people start paying for cover in their 30s and effectively subsidise extra claims by the time they get old; or they don’t. But then they must pay a swingeing premium in later life.

Insurers have already frozen or reduced prices on some plans and brought out very cheap new ones for those who just want the most basic form of cover to avoid age-loading (see our lead question this week).

So a sweeping reform of our health system is being introduced fairly quickly and effectively with a minimum of fuss. Could this really be happening? Here, in Ireland?

Yes – but… There is always a ‘but’ with anything to do with the Health Service.

Could it all be derailed by another big train coming down the tracks – Universal Health Insurance (UHI)?

The Government’s own Q&A guide (see health.gov.ie) to LCR asks: ‘Will my health insurance cover be taken into account under Universal Health Insurance?’

The (not very clear) answer is: ‘LCR relates only to the current voluntary system and will not apply when we move to compulsory health insurance (under UHI).’

So what is going to happen under UHI, the proposal that has been kicked around for years under various health ministers?

The last we heard is that it is definitely on the way and will be compulsory.

But with age-loading, health cover will soon be unaffordable to many older people who have never subscribed to it before.

And how can you force someone to buy something they can’t afford?