Health insurance premiums to increase

Health insurance subscribers face continued increases in charges as the population ages and the rise in medical costs outstrips general inflation, according to Joe Durkan of the Department of Economics and Centre for Health Economics at University College Dublin (UCD).

Writing in the summer edition of the Irish Banking Review, Mr Durkan says the system of health insurance that has developed in Ireland has been based on community rating - where all age groups pay the same amount - rather than risk rating.

The difficulty with community rating is that people can delay membership until quite late in life when they are more likely to require healthcare, but are then subject to the same costs as younger members.

As a result, all premiums will increase to reflect increasing claims.

The increased cost of health insurance for the young, in relation to their current potential claims gives them an incentive to abandon health insurance - or not to take it up until later in life. In turn, this could push premiums even higher.