More than a million VHI customers face price increases on their health insurance plans, with market expectations growing that Laya, the second largest insurer, will hike their prices too.
VHI, the State’s largest private health insurer, said it would increase prices by an average of 4.8 per cent across its health insurance plans due to increased demand for healthcare and rising costs.
The price hike will put further pressure on households dealing with cost-of-living increases.
The increase comes after Irish Life imposed an average increase of 5 per cent this month and follows rebates paid to customers due to the reduced use of private healthcare during Covid-19.
Health insurance broker Dermot Goode estimated that the price increases could add between €60 and €250 to the cost of private health insurance for a typical family of four.
He said while the average increase stood at 4.8 per cent, some customers could face higher increases on their plans, with the hikes ranging from 0.5 per cent up to more than 6 per cent.
He expects Laya to follow rivals and increase its prices as a period of price stability in health insurance ends and insurers start passing on the rising cost of healthcare to their customers.
“Medical inflation is running at between 5 and 12 per cent,” said Mr Goode, of totalhealthcover.ie, part of the Lockton insurance group. “We were surprised that VHI was able to hold out. We were expecting this to happen in quarter four of last year but now once one breaks ranks they will all follow suit pretty quickly.”
Laya declined to say whether it would be increasing its prices. A spokeswoman for the insurer, which has 675,000 customers, said it continued to monitor healthcare costs, and that it would keep cost pressures “under close review and take a prudent view on claim cost management.”
The VHI said that this was the first price increase in two years, following a price reduction in 2022, and the return of €450 million in premium waivers over the past three years.
“We understand that our customers are already dealing with the pressure of rising costs across the economy, and we have made every effort to keep the price increase as low as possible,” said Aaron Keogh, managing director of VHI. “However, because of these cost pressures the price increase is necessary.”
The cost of meeting the healthcare needs of customers had increased significantly in the last 12 months as demand for health services returned to pre-pandemic levels, the company said.
The trend reflects the pent-up demand for healthcare services resulting from a period of reduced access to services over the last two years, according to the VHI.
The company said there had been a significant increase in costs associated with the delivery of healthcare due to increases in wage, energy and other costs, including infection control.