VHI's 9 per cent increase in premiums from next September has been welcomed by only one party - its competitor BUPA, which quickly announced that it would not be raising its rates this year. When it does increase premiums - and no one should be under any illusions that BUPA's costs will not go up - they will be "modest", says its spokesperson.
BUPA now insists that it is even more competitive on price than VHI - a claim rejected by VHI which says that BUPA is unfairly comparing the different schemes and not highlighting how its most popular plan - Essential Plus - is only cheaper because of the £50 excess charge for each hospital visit. BUPA's counter-claim is that when its extra benefits are included, its plans are still more competitive, excesses included.
With the health insurance waters so muddy, it is not easy to choose between the companies. Independent consultants Mercer Ltd regularly advises companies on the pros and cons of the two schemes as part of its employee benefits service. Ms Aisling Kennedy, of Mercer, says it "is not so much to compare like with like since the range of cover is pretty vast, but to examine the differences in services and benefits".
For example, whereas BUPA offers full cover in all its participating private hospitals, VHI offers between 92-96 per cent cover in most private hospitals with the shortfall having to be picked up by the patient. The fees charged by BUPA's list of consultants is fully covered, whereas about 5 per cent of VHI's consultants are still sending out topping up bills to patients. BUPA's outpatient/GP cover is not as limited as VHI's, says Mercer.
On the benefit side, the Mercer view is that when comparing BUPA's Essential Plus scheme and VHI's Plan B there is no real difference between the companies for maternity care, but psychiatric benefits are better with VHI which offers 180 days cover instead of just 100 with BUPA. Convalescence benefits amount to 14 days cover from both companies, but BUPA's list of homes is wider. BUPA offers full cover for out-patient radiotherapy while VHI's consultants' fees are only covered up to £30 a session. On the other hand, VHI covers infertility investigations after one year's membership while BUPA does not offer this benefit at all.
Mercer points out that BUPA has about 25 per cent fewer participating hospitals than the VHI, but patients may be able to avail of British member hospitals for treatment not available here. The cardiac surgery shortfalls that are payable with VHI's Plan A and B (i.e. £6,000 and £1,000 respectively) are fully covered by BUPA but Mercer notes that VHI provides 90 per cent cover under Plan B for a wider range of procedures than BUPA at the Mater Private and Blackrock Clinic.
Out-patient cover is examined carefully by Mercer and it concludes that the BUPA benefits are more generous than those of VHI, noting that the individual and family excesses are lower at BUPA, by as much as £50 for the Essential Plus scheme where the £50 hospital excess does not apply for out-patient cover.
Mercer notes that the excesses are set at such a high rate in both cases that even 10 typical GP visits and two consultations in a year at a total cost of £260 for VHI and £330 for BUPA means that no refund would be forthcoming. Where out-patient costs are higher, however, BUPA's clients are the greater beneficiaries.
While BUPA's top plans are considerably more expensive than those of VHI - in the case of Essential Gold versus Plan E by as much as 14 per cent - BUPA's other plans are on average, about 10 per cent cheaper than VHI, says Mercer.
The biggest price difference, is for a family with two adults and three children, two of whom are over age 18 and still in full-time education. The cost difference is as much as 37 per cent in the case of Essential Plus scheme versus Plan B because the over-18's are still given the children's rate by BUPA. Where there are no older children, the price differences between the two companies virtually disappear if the BUPA client opts out of paying the Essential Plus £50 excess for each hospital visit. Finally, Mercer's view of all the top price plans is that they do not present particularly good value for money and that Essential Gold, in particular should only be considered "if price is no object".
"The BUPA product is a very good alternative to VHI," says Ms Kennedy. "For a family, with older children still in school the price differential is so vast that it cannot be ignored. Under the current legislation there is a high degree of transferability allowed and you can switch between the VHI and BUPA and back if you so wish." The companies must also give you credit for any periods of time you must serve before cover begins, says Ms Kennedy.
