Insurance firms in dark over levy changes

Tue, Oct 2, 2012, 01:00

THE DEPARTMENT of Health has been accused of keeping the State’s four health insurance providers in the dark about changes it plans to implement in the new year which could add as much as 10 per cent on to the cost of some insurance policies.

Reports that health insurance premiums will increase by up to €200 because of changes being made to the health insurance levy have been dismissed as “purely speculative” by the Department of Health.

However, Donal Clancy, the chief executive of Laya, the State’s second largest provider, warned the changes being planned by the Department of Health would inevitably put “upward pressure” on prices and he accused the Government of failing to consult with the providers about the changes that will be brought in.

“I don’t know how much the levy will increase by but there will be upward pressure on prices and I don’t think the Government is taking into account people’s ability to pay,” he said.

The Department of Health wrote to health insurance providers two weeks ago to say that a new permanent risk-equalisation scheme and new levies will come into effect from the start of next year.

The changes are aimed at ensuring older people do not pay more for cover than younger, healthier people.

At present a levy of €285 applies to each adult’s health insurance policy while a €95 charge is imposed for each insured child.

Under the changes, there will be a new rate for people with policies which only offer cover for treatment in public hospitals while another rate will apply for people with private hospital plans.

The letter does not say how much the levies will be and industry sources told The Irish Times that they did not expect any announcement on the impact the changes will have to be made until late in December.

The letter also said a 90-day notice period would be required “for both new products and for changes to existing products (other than premium changes)”.

Changes to existing products apart from premium changes will only be allowed to take effect from January 1st of any year, subject to the 90-day notice period.

“We have had no consultation with the department and working in the dark makes it very hard to plan our business for the new year,” Mr Clancy said.

“These changes are to be implemented in January and it is already October and we have got no information from the department,” he added.