Cost of VHI policies to increase by up to 45%
THERE WAS further misery heaped upon the shoulders of VHI Healthcare’s more than 1.3 million members yesterday after the company announced plans to increase the cost of its premiums by as much as 45 per cent from the beginning of next month.
The company was at pains to stress that the average increase for the majority of its subscribers will be 15 per cent but that masks a reality that many people who have policies with the company will be confronting today.
People insured under the company’s Plan B and Plan B Options policies will be hardest hit and holders of either of these two plans will see the cost of their policies increase by between 35 and 45 per cent.
From the beginning of next month, the premium for an adult on Plan B will go up by €317 to €1,224 (€26 per month), while someone with a Plan B Options policy will see their annual premium rise by €444 to €1,430 (€37 per month).
While the Plan B and Plan B Options policies are no longer the most popular products sold by the State’s largest health insurance provider, which has 1.35 million subscribers – down from 1.4 million last year – they still account for some 29 per cent of the total customer base.
People on Plan C face a 25 per cent hike, which will see their premiums increase from €1,431 to €1,788, while Plan D policy-holders will see an increase of 21 per cent, from €1,931 to €2,337.
Plan E, which is the top-of-the-range policy and covers private rooms in all the State’s high-tech hospitals, will also increase by 21 per cent, going from €2,833 to €3,427 per person.
Families on a Parents Kids policy, which the VHI says is its most popular family plan, will see their premiums increase by 15 per cent – about €331 per year – from the beginning of next month.
The increase in family policies announced yesterday will result in an aggregate increase over the past two years of 13 per cent as the company lowered its child rate on these plans in 2009 in an attempt to regain market share from Aviva and Quinn Healthcare, which had been aggressively targeting younger people with schoolgoing children.
VHI chief executive Jimmy Tolan said he regretted the increases but insisted that the “sole purpose of the increases are to fund our customers’ needs. We have paid out over 95 cent in every euro we have taken in.
“Some of the decisions we have taken here are very difficult but we are operating in a regulatory environment which is broken and it needs to be fixed.”
He insisted the company “had to be sustainable” and said that while plans to sell the company which were announced last year were in train, he did not anticipate it would move into private ownership for at least three years.
While both Aviva and Quinn Healthcare were quick to issue statements condemning yesterday’s price increases, they too have either already announced premium increases or look likely to do so in the months ahead.
In November, Quinn Healthcare announced its prices for 2011 and said its policies would increase by an average of 7.9 per cent.
While it is difficult to compare like with like, the two Quinn Healthcare policies which are most comparable to the VHI’s Plan B and Plan B Options are Essential Health and Essential Plus (excess). In November it increased the cost of its Essential Health plan from €730 to €766, while its Essential Plus (excess) increased in price more substantially from €778 to €898.
For its part, Aviva last announced a price increase last April but further increases for its customers are likely this spring.
A spokesman for the Health Insurance Authority said the volume of concern over the announcement of price increases caused its website to crash yesterday.