Budget health cuts proving to be a bitter pill to swallow
The Government is taking medical cards off people, but at the same time it is not incentivising them to get private health insurance
There is no avoiding it. After the budget, looking after your health is likely to diminish your wealth.
If you have a private health insurance policy, you’re going to see the price of your insurance rise automatically due to the cut in tax relief.
And if you have been the recipient of a medical card in the past, you might find that the reduction in income limits means you will no longer qualify.
There are many “mixed messages” in this year’s budget, says Eamon Timmins of Age Action Ireland, noting that on the one hand the Government is taking medical cards off people, while on the other hand it is not incentivising people to get private health cover with the cut in tax relief.
The only winners, it seems, are parents of children aged five and under. But there is still no firm timeline on when those changes will be implemented.
So how might you be affected?
Rising cost of health insurance
It was a measure that was implemented, in Minister for Finance Michael Noonan’s words, to hit only those with “gold-plated” health insurance policies .
The reality, however, is that the decision to cap the amount of a health insurance policy eligible for tax relief at €1,000 for an adult, and €500 for a child, is likely to hit as many as 90 per cent of those with health insurance policies.
After all, the average price of a health insurance policy is €1,500.
Under the present system, with tax relief available at 20 per cent, this brings the net cost down to €1,200. Once the new regime is implemented, the net cost of such a policy will rise to €1,300. And the more expensive your policy, the more you are set to lose.
As our table shows, someone with an aforementioned “gold-plated” policy will have to pay an extra €495 a year for their policy.
Health insurance analyst Dermot Goode of Cornmarket says the move is going to have a “huge impact” on the elderly.
“Many elderly members, while their healthcare needs will be great, may now have to downgrade their cover,” he says, noting that this may lead to shortfalls ranging from €2,000 to €3,500 depending on the plan held and the procedure in question.
For example, some insurers now require the patient to contribute up to 20 per cent of the cost of orthopaedic procedures. So if the bill comes in at €20,000, which would not be unexpected, the patient has to pay €4,000 themselves.
Given the upward trajectory in the cost of health insurance in the recent past, Goode suggests there is no end in sight, with prices expected to rise by between 3 per cent and 10 per cent next year. This means even more people will be pushed into the tax cap.
Free GP visits
One positive outcome of this year’s budget was the introduction of free GP visits for children aged five and under, which, it is said, will apply to some 240,000 children.
While it is not quite the free GP care for all that the Government had promised, struggling parents will welcome the move, given that a visit to your local doctor can cost as much as €60. And then there’s the likely trip to the pharmacy afterwards, when even a bottle of children’s paracetamol can set you back as much as €8.