The impact of risk-rated insurance
New measures could even allow medical exams and questionnaires
“In a risk-rated market premiums are allowed to take into account an individual’s current health status and future risk of ill health and prices may vary based on risk factors such age, gender, occupation, lifestyle, medical history and family history of disease , .”
If elements of risk-related private health insurance are introduced they will put all private beds out of the reach of hundreds of thousands of people who currently have access to them.
The cost of premiums for older people will almost certainly skyrocket. On the basis of experience elsewhere, extensive medical questionnaires and even medical exams could be permissible before policies are offered to anyone deemed by insurance companies to be high risk.
Today all private health insurance companies who operate in the Republic are required to offer community-rated health insurance so everyone pays the same regardless of their age or whether they are considered a high or a low health risk.
But in a risk-rated market premiums are allowed to take into account an individual’s current health status and future risk of ill health and prices may vary based on risk factors such age, gender, occupation, lifestyle, medical history and family history of disease.
While it may be argued that this is fair – and it is the norm across the European Union – it will hit older people anxious to retain cover for procedures in private hospitals.
If risk-rated insurance premiums become the norm, the costs of private health insurance for this cohort – who are far more likely to need hospital care than younger people – will climb dramatically. Increases of 300 per cent on some policies would not be unlikely.
The cost of insurance policies covering maternity care would increase significantly for women aged between 18 and 45, while people with a family history of heart disease or strokes could also see their premiums rise.
Ireland is one of only a handful of EU countries that does not have a risk-related private health insurance market. In countries where insurers use health status as a variable for risk rating, applicants have to complete extensive medical questionnaires. In some countries, medical examinations are needed for people of a certain age before insurers will even consider offering them cover.
The elements used to determine policy prices vary from country to country but in the UK, private health insurers typically take into account age and lifestyle factors – such as whether the applicant is or was a smoker. Some jurisdictions allow insurers to deny cover, but under the proposals being considered by the Government, “a person must be accepted by their chosen insurer and has the right to renew their policy”. The big question will be, can they afford it?