Since competition began in the private health insurance market with the arrival of BUPA in 1997, the number of people joining such schemes has increased. Although every Irish citizen is entitled to free basic public healthcare, it is estimated that more than 40 per cent of the population now has private insurance subscriptions with either BUPA or the VHI.
People join such schemes to jump the long queues for treatment, widen the choice of hospitals and consultants and to ensure adequate health coverage in later life.
Despite continuing price and public relation wars between the two insurers, VHI still has the overwhelming majority of subscribers while BUPA continues to offer the best overall price.
The membership figures for each private insurer have nothing to do with subscription costs or the quality of care, says Ms Aisling Kennedy of Mercer Consultants and Actuaries. "I think there's a number of factors: inertia and [the fact that] people are incredibly cautious when it has to do with their healthcare. They fear they'll lose something and there's an element of loyalty to VHI."
Under the law, however, individuals who already have private insurance cannot be penalised for moving to another plan or company, says Ms Kennedy. So, coverage will not be lost if a member decides to switch insurers or switch between plans with the same insurer.
The situation is different for those who don't currently hold private insurance as they're subjected to waiting times before receiving the full coverage from either BUPA or VHI.
People tend to stay with what they know unless there is something dramatically different on offer, Ms Kennedy says. Neither BUPA nor VHI has given people a real reason to switch to their plans as they have not created innovative products which address gaps in out-patient coverage and high excess amounts.
Ms Kennedy would like to see the development of comprehensive healthcare plans that include primary preventative care. "If you cover primary preventative you can stop problems occurring later on," she says.
Many companies offer their employees a healthcare cash plan in addition to private insurance to cover annual expenses like GP visits, dental, optical, X-rays, tests and alternative therapies. These cash plans are offered by both the Hospital Saturday Fund (HSF) and HSA Healthcare.
Following VHI's recent announcement of an increase of more than 9 per cent in premiums across the board, VHI's Plan B Options is now 22 per cent more expensive than BUPA's similar Essential Plus Plan.
Both companies maintain that none of their plans is exactly comparable. VHI prefers to compare its most popular scheme, Plan B with BUPA's most popular, Essential Plus. BUPA and independent healthcare industry experts believe a more accurate benefit and price comparison exists between VHI Plan B Options and BUPA Essential Plus. However, the same experts accept the difficulty presented to the comparison by the £50 (€63.49) excess charged on BUPA's Essential Plus plan.
Mercer Ltd's employee benefits consultancy division compared BUPA and VHI benefits and prices following announcement of the recent VHI premium rise. The specific benefit cover mentioned in the following sections is based on the Mercer report.
Benefit Comparison
Hospitals and Consultants: Hospital coverage may be an important consideration for those living outside Dublin. Before joining a scheme it is important to ensure that your local hospital and consultant are included on the insurers list.
VHI claims to cover 12 more hospitals than BUPA or 98 versus 86 participating hospitals. However, BUPA provides cover for treatment in BUPA hospitals in Britain if the treatment is not provided in the Republic. VHI provides coverage outside the Republic only on a discretionary basis.
The cost of a hospital stay is fully covered at the vast majority of listed hospitals for both VHI and BUPA says Mercer. The BUPA Essential Plus Plan charges an optional excess of £50 per private hospital admission. This may be waived if a member pays a higher premium. VHI does not have full cover arrangements with the Kylemore Clinic.
Fees are fully covered for consultants participating in the insurers' full cover schemes so there is no balance billing. There may be an additional charge to the patient from non-participating consultants who are paid a lower amount by the insurer. Mercer says approximately 97 per cent of consultants are in both insurers' full cover schemes.
Treatments: BUPA fully covers the chemotherapy and radiotherapy cancer treatments on both an in- and out-patient basis if delivered by a participating consultant. VHI covers out-patient radiotherapy with a limit of £30 per session subjected to the usual excess amounts of £250 for an individual and £400 for a family, says Mercer.
BUPA provides better overall cover for major heart surgery than VHI. The insurer provides full cover for such surgery in the Mater Private and Blackrock Clinic, whereas VHI's coverage ranges from 35 to 90 per cent depending on the plan purchased. VHI fully covers some additional heart procedures in these locations but these are covered by both insurers in other hospitals.
The length of psychiatric cover is better with VHI, which provides 180 days inpatient psychiatric compared to BUPA's 100 days.
Convalescence: Both insurers provide for up to 14 days stay in a convalescent home. VHI covers £35 to £55 per day in a limited number of hospitals, while BUPA provides £20 per day in any State nursing home. BUPA plans give you access to a wider range of hospitals but with a reduced benefit, says Mercer.
Outpatient Excess: VHI's Plan B stipulates an annual excess of £250 for individuals and £400 for a family towards out-patient expenses, says Mercer. This reduces to £175 and £300 respectively when a member chooses Plan B Options. BUPA's Essential Plus plan requires an out-patient excess of £200 for individuals and £350 for families.
Excess: Excess payments for private health insurance are relatively high in Ireland. Excess is the amount of any claim that must be paid by the member before the insurance company will pay. Excesses may be charged for in-patient or out-patient procedures, stays or visits but this amount is usually reduced when purchasing a more expensive plan.
BUPA requires middle-range plan members to pay the first £50 of private hospital bills, while VHI members do not incur excess charges for hospital stays.
Price Comparison
Each private health insurer increases its prices each year, VHI in September and BUPA in February. Therefore, if BUPA raises prices by 9 per cent as it did last year the 22 per cent price differential decreases to 13 per cent.
VHI claims: "Increase in premiums is necessary to meet the cost of medical inflation, including the cost of ongoing developments in modern medical healthcare and technology. . . the rise in consumption of healthcare each year and the increasing costs of hospitals and consultants."
The accompanying chart sets out the prices on offer as of September 1st next, for BUPA and VHI's most popular plans.
Mercer compared the cost of these plans for a family of two adults and three children using an annual premium and group scheme rates. It found that BUPA Essential Plus with £50 excess is 19 per cent cheaper than VHI Plan B and 27 per cent cheaper than VHI Plan B Option. The same plan without £50 excess is 9 per cent cheaper than VHI Plan B and 19 per cent cheaper than Plan B Option.
Prices were also compared for a single member with an annual premium under a group rate scheme. BUPA Essential Plus with £50 excess was 18 per cent cheaper than Plan B and 26 per cent less expensive than Plan B Option. BUPA Essential Plus without £50 excess was 9 per cent and 18 per cent cheaper respectively.
The most dramatic price difference is for full-time students under 21 who pay £88.95 for BUPA Essential Plus with £50 excess, £100.84 with BUPA Essential Plus without £50 excess, £309.60 for VHI Plan B and £144.41 for Plan B Option. VHI members tend to purchase VHI Plan B Option for any students in the family while the others stay on Plan B, said a VHI spokeswoman.
In terms of clear-cut breakdowns, Ms Kennedy says VHI provides better psychiatric cover but BUPA offers much better value for money for students.
"I think across the board everyone's circumstances are different, but for the average person the BUPA product provides better value for money and a better range of benefits," she says.
Besides price and benefits, bigger questions remain in the private insurance market. Competition has clearly increased the number of people taking out private health insurance, but if this market continues to grow, will the whole reason for going private disappear because members won't be able to skip the queues any more, asks Ms Kennedy.
She wonders if the current system will work five years down the road. "Nobody seems to have a handle on it. At what percentage of private health insurance membership will it cease to serve its purpose?"
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