Rise in health insurance expected

Health insurers told the committee the changes to the way beds are charged for will cost them ?250 a year.

Health insurers told the committee the changes to the way beds are charged for will cost them ?250 a year.


Big increases in health insurance premiums are on the way because of Government plans to charge more for the use of private beds in public hospitals, an Oireachtas committee has heard.

Health insurers told the health committee today that the new charges would cost them €250 million over the next three years, resulting in a significant hike in premiums.

Donal Clancy, managing director of Laya Healthcare, said the proposed charges would result in a 20-40 per cent increase in premiums. The proposed charges were the biggest threat to the industry and would prove to be "the straw that broke the camel's back," he said.

Unless the proposals were changed it would be "game over" and the market would shrink to a fraction of its current size, he predicted. The effect on the Exchequer's finances would be the opposite of what was hoped.

John O'Dwyer, chief executive of VHI, said the biggest challenges in the market were affordability and the increase in public hospital charges. The increase in hospital charges would result in a signicant increase in charges if it goes ahead as proposed by the Government.

Mr O'Dwyer said the cost of providing cover for a 35-year-old was €700 a year on average, whereas for a 75-year-old it was €4,000. If the 75-year-old, was sick, the cost could be many multiples of this figure. Without risk sharing, older and sicker customers wouldn't be able to afford health insurance.

As things stood, it cost an insurer €1,000 less to provide cover for a 35-year-old compared to a 75-year-old, he said, and this was leading to cherry-picking of customers.

Jim Dowdall, chief executive of Glo Health, said the market was fast approaching the tipping point of unaffordability. He criticised the manner in which the Department introduced a two-tier insurance levy which means that some with a basic €500 basic policy would end up paying the same amount of levy as someone who could afford a €4,000 plan.

When the levy is increased at the end of March, a family of four will be paying €940 a year in levy charges as part of their health insurance premium, he pointed out.

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.