Patient power is killing off Reilly’s sneaky hospital tax sneaky hospital tax
Hallelujah! Health insurance prices are finally coming down, and it is at least partly due to patient power.
People are starting to see through one of the sneakiest and most reprehensible stealth taxes yet.
It was brought in by former health minister James Reilly before he was moved out of the Department of Health in 2014. Here’s how it works: Everyone can receive public healthcare at low cost to their insurer if admitted through A&E.
But Dr O’Reilly pulled a fast one to save his Government money, by getting patients to sign a waiver form rejecting this right – and allowing their insurer to be given whopping great bills as private patients instead. He enabled hospitals to charge private patients up to €1,000 per night for a private room – and €813 per night for a public ward – if they signed a waiver form.
A stay for a hip replacement, for example, could cost an insurer €30,000 if the patient signs the form – instead of a fraction of that cost if done through public care, which may be no different.
Cash-strapped hospitals were quick to latch on to this moneyspinner. It was so lucrative that staff were assigned to pressure patients in A&E to sign the waiver form so the State could fleece their insurers.
Some people may have signed in the hope of getting a private room – a rare event that many policies don’t cover anyway.
Patients are given the impression that they won’t lose out. But they do – they pay through their premiums and with possible shortfalls in cover that they may have to pay extra for. The form says the costs of their hospital stay are billed to the insurer but there’s also a clause making patients liable for any shortfall if their cover is inadequate.
So many people signed waivers that it added an estimated 5% to the cost of health insurance, reversing a previously downward cost trend.
Policy prices costs rose by €50 or more a year, worth €100m.
This newspaper was among those who campaigned against it.
Your Money wrote in 2016: ‘The Government shouldn’t try to pull the wool over our eyes and indirectly levy this unfair and surreptitious charge on private health insurance subscribers. It
would be more honest if they simply added a 5% tax on health insurance.’
Laya advised its customers to get in contact if placed under pressure to sign the forms.
The VHI said there was no evidence patients who do sign were getting priority care.
And Glohealth urged ‘patients to sign a waiver only if they are guaranteed to receive private treatment from a private consultant in private accommodation’.
Well, the campaign appears to be working.
This week, VHI is to cut its prices for the third time in less than a year after it reported a 33% jump in profits.
The insurer will reduce premiums by an average of 2% in July on 54 plans, a move that will save a typical family €50.
VHI said it was benefiting from better claims management.
‘This is a just reward for those consumers who have exercised their right to be treated as a public patient when in hospital and who have not accepted these new private rates in public hospitals,’ said Dermot Goode of totalhealthcover.ie.
Laya agreed. ‘There has been a welcome shift in people’s awareness and understanding of the public beds charges,’ said a spokesman.
‘More and more people are demonstrating an improved knowledge of their rights as private patients, and making a more informed decision when faced with the option of signing the waiver form and waiving their right to be treated publicly.’
While stressing that claims costs are still high, it said: ‘Health insurers need to keep educating their members on this matter to generate further claims reductions if possible.’