For the fourth time since the beginning of this year, Irish Life Health has announced a price rise, which will kick in on January 1st.
As it has done every other time, the insurer has blamed the 5 per cent average hike on the higher cost of medical treatments and expensive advances keeping us all fitter and happier – and crucially – alive longer than in times past.
There could be two reasons why Irish Life Health would need to go to the well four times in the space of a year.
One is that the leadership team is hopeless at forecasting medical inflation, to the extent that it has to rip up its business plan every quarter. This cannot be discounted.
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The other is that the company is taking us for mugs by increasing prices four times a year, a little bit at a time, rather than putting through a hefty double-digit rise once a year.
When you take out a health insurance policy, you and the provider are locked into a contract at an agreed price for 12 months, and no increases – or indeed decreases – can be imposed before then.
The way Irish Life Health – and to be fair to it, most of its rivals – rolls out its price hikes is absurd.
Health insurance companies are clearly reluctant to announce price increases of 10, 12 or 15 per cent once a year. Instead, they up their prices in smaller increments three or four times a year, which softens the headlines in the short term but still leaves customers facing huge price rises when renewal time comes around.
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It also seems that health insurers are not overly concerned their prices will climb too high and result in huge numbers of people exiting the market.
They know they have the fear factor on their side. The public health system is in a shambles and those who can afford to side-step it will continue to do that no matter how much prices go up by.
