VHI to increase prices by 3% from April despite falling claims
Health insurer says increase reflects rising cost of healthcare
The company waived a proportion of customers’ premiums for the second time in December due to lower claims. Photograph: iStock
Health insurer VHI is to increase prices by an average of 3 per cent from April 1st despite the level of claims falling during the Covid-19 crisis.
The company said the price increase - the first in 13 months - was necessary to cover the rising costs “of providing quality healthcare”.
It will see the cost of the VHI’s One Plan Family policy rise by €29 to €1,282 for a single adult per annum and by €85 to €3,091 for a family of two adults and two children.
The VHI said the cost of delivering care in clinical settings is increasing due to enhanced and necessary Covid-related infection control measures, as well as the cost drivers associated with increased access to the latest new drugs, new technologies and new procedures.
The company waived a proportion of customers’ premiums for the second time in December.
This was due to the fact that claims for 2020 were lower than expected - a result of the reduced access to healthcare facilities during the pandemic.
“With the focus justifiably on public health and the national response to the pandemic, private facilities were unavailable to our customers for a period of time and public hospitals were treating mainly Covid-19 patients for most of the year,” Declan Moran, the VHI’s director of marketing and business development, said.
“As a result, claims were down. In direct response to that, Vhi waived premiums for our customers on two separate occasions over the last 12 months returning €265 million to customers,” he said.
Despite the fall-off in claims, the cost of delivering care to those who avail of it, continues to rise, he said.
“ There will be significant pent-up demand across all parts of the healthcare system and we need to look to the future to ensure that we can deliver that care to customers, not just this year but over the next number of years,” he said.
“Our pricing announcement today will ensure we can meet these future healthcare requirements,” he said.
Commenting on the fact that some customers who are renewing will experience a price increase having just received a premium waiver, Mr Moran said: “Waivers of premium and pricing are determined by very different factors.”
“Premium waivers are informed by historic behaviour. We look back on the claims experience and where claims are below what we forecast, we return value to our customers,” he said.
However, Mr Moran said pricing looks looks forward and anticipates future healthcare needs and related claims costs.