Insurers sweeten the pill

Are the new concessions by private health insurers as good as they sound, asks FIONA REDDAN

DESPITE ALL the doom and gloom, there are some upsides to a recession. Cheaper house prices, less expensive groceries, half-price hotel deals, cut-price cars and now, health insurers appear to be developing a conscience.

Are the latest concessions though by private health insurance providers as good as they sound?

Last week the VHI said it had offered thousands of customers who had been made redundant and could no longer afford health insurance the ability to rejoin the VHI without serving the usual waiting period before their policy once again became effective.

This allowance is of significant benefit to policyholders who have to take a break from private health insurance due to redundancy as waiting periods can be extremely onerous.

Under normal circumstances, if you have a gap in your cover of more than 13 weeks, the health insurer can impose waiting periods when you renew your cover. This means you won’t be covered for certain ailments that emerge within that period.

For example, if your cover lapsed with VHI and you rejoined and then developed a new illness, you would have to wait 26 weeks for cover if you are under 55, 52 weeks if you are aged between 55 and 64, and 104 weeks for those aged 65 or over.

Even more severe are the waiting periods for existing illnesses, which range between five and 10 years, while maternity benefits have a 52-week waiting period.

Similar waiting periods are in place at the other insurers.

The VHI is strict about ensuring you have been made redundant, so if you are looking for the waiver, you will need to prove your situation by either submitting a letter from your employer or a copy of a letter from social welfare stating that you are claiming benefit.

The VHI is not the only health insurer offering a sop to those who have lost their jobs.

Quinn-healthcare is also offering a similar concession and is willing to waive the initial waiting period of 26 weeks and provide immediate cover for any new conditions to members who rejoin if they have cancelled their policies for a year. However, according to the company, waiting periods for other cover may still apply.

Hibernian Aviva, however, is not offering any concessions. Rather, it is encouraging any customer finding it difficult to meet renewal payments to get in contact so they can look at options for rescheduling payments or changing plan.

“We understand that many people are under more financial pressure than before and would encourage any customer to contact us if they are having difficulty so we can explore options for them to reschedule payments or to change plan.”

In addition to the waiver on waiting periods, there are also other signs of increasing competitiveness in the marketplace as each of the main insurers look to increase its market share.

When Quinn-healthcare stopped providing cover at St Patrick’s University Hospital and St Edmundsbury Hospital in Lucan in March, the VHI was quick to step in and try to win over Quinn’s customers.

Again, it offered to waive waiting periods which would have applied in the case of these hospitals for those who transferred to the VHI before May 15th.

The VHI has also reduced the cost of premiums for children on its Plan B and Plan B Options policies to €200, which means that the cost of two adults and three children on its Plan B policy is now €2,256 (previously €2,556) and on Plan B Options is €2,400 (previously €2,760).

Insurers have also been looking to improve their product offering.

VHI most recently announced that it would offer full cover for treatment at Beacon Hospital in Dublin to almost 90 per cent of its members as of June 1st.

This means that members on any of the following plans – Plan B, B Options, C, C Options and LifeStage Choices First Plan Plus, Family Plan Plus and Forward Plan – can receive cover for services at the hospital which uses the most advanced diagnostic equipment and specialises in cancer and cardiac treatment.

The insurer is also offering cover for its Swiftcare Clinics on its LifeStage Choices plans of €75 back for up to five visits a year.

Cover has also improved at Hibernian Aviva, which has a new package of maternity benefits, including 4D baby scans, cranial osteopathy and baby massage, as well as a new GP-based health screening service.

At Quinn-healthcare, policyholders can now avail of reduced-cost cervical cancer vaccines, through its agreement with the Tropical Medical Bureau (TMB).

Following the Government’s decision to withdraw its vaccination programme for girls over the age of 12, the vaccine has become available privately. Under the Quinn scheme, the reduced rate will be €360 (reduced from €390) for the Cevarix vaccine and €450 (reduced from €480) for Gardasil.

However, the latest improvements and concessions will only be of limited relief to consumers as those who look to renew their policies will most likely find that prices have risen again.

Last year the Government introduced a health insurance levy of €160 for an adult and €53 for a child, which resulted in price increases across the board. VHI increased its prices by 23 per cent, Quinn-healthcare raised its prices by about 16 per cent, while at Hibernian Aviva, members saw the levy added on to the cost of their policy.

These price hikes saw the cost of VHI’s Plan B scheme rise by €163.34, up to €828, while Quinn-healthcare’s similar Essential Plus plan rose by 19 per cent, or €114, to €715.

More increases are likely to be on their way.

Last week VHI reported a €65 million deficit which it attributed to the substantial increase in the number of medical procedures it paid for on behalf of its members.

While all the insurers indicated that they were not considering price increases at this time, as the cost of health services continues to rise in Ireland so too will the cost of private health insurance.

This means that many consumers, even those who haven’t been made redundant, are struggling to meet their renewal costs, so are opting to downgrade their policies.

However, people adopting this approach should be aware of the risks. While in the short-term this will save money, over the long-term it may be short-sighted as, when you look to upgrade your cover, you will be precluded from all of the benefits associated with the new scheme as waiting periods will apply.

While insurers are making some concessions for those forced to cancel their policies altogether, VHI and Quinn will still enforce the relevant waiting periods for those who have to downgrade their policies at this time.

For example, if you downgrade from Quinn’s Healthmanager policy to its Essential Plus (Excess) product, you will save yourself €342. However, if your financial circumstances improve and you look to go back to the more expensive policy, a waiting period of two years will apply for cover at the higher level for pre-existing illnesses or injuries.

While insurers are quick to point out improvements in their product offerings, they have also been pulling back on certain services.

For example, under its LifeStage Choices range of healthcare plans VHI has reduced the number of GP visits members can claim for from up to 25 back to seven, while the maximum amount that can be claimed in respect of each visit has also been reduced from €40 to €35.

The insurer has also cut back on the number of qualifying consultant, physiotherapist and dentist visits under the schemes, from up to 25 to up to seven.

Quinn-healthcare has also been pulling back, and as previously mentioned has stopped providing cover for mental health services at St Patrick’s University Hospital and St Edmundsbury Hospital.