AVIVA HEALTH Insurance is to increase the cost of all its premiums by 15 per cent from next year in a move that will cost many Irish families more than €300 a year.
The price hikes will begin to take effect from February 15th, and the news will come as a major blow to the company’s almost 400,000 customers, who have already had to contend with two increases imposed by the company over the past 12 months.
The third-largest private health insurance provider in the market increased its prices by 14 per cent in March and by a further 9 per cent in August.
All told, many Aviva subscribers will have seen their premiums increase by close to 40 per cent in less than 12 months.
The company, which has about 380,000 subscribers, said the latest round of hikes was unavoidable, and it blamed medical inflation, escalating claims costs and higher charges for private beds in public hospitals, which the Government is to introduce from the beginning of next month.
In a statement, Aviva said it understood that “affordability is paramount for Irish consumers and is committed to managing its costs”.
It said it had “put a number of measures in place in an effort to control costs and minimise premium increases”, such as “developing and encouraging primary care solutions, actively negotiating with our suppliers and providers and introducing cost efficiencies into our administrative processes”.
However, the price increases are unlikely to be restricted to the 15 per cent announced yesterday.
Aviva warned that the controversial proposals put forward by Minister for Health James Reilly to change the current system of designating beds in public hospitals for private patients is likely to “have a significant impact on health insurance premiums”.
In the budget unveiled earlier this month, the Government put forward proposals that will see the cost of private beds in public hospitals increasing and legislation being introduced to make bed designation clearer.
The steps will allow hospitals to pass on increased costs to private patients and could lead to premium increases of at least 50 per cent almost immediately, the VHI has warned.
These changes, when they come into effect, could see the cost of an average health insurance policy for a family of two adults and two children climb by more than €1,000 a year.
In the wake of the budget and the claims by the VHI, the Minister said he saw little to support suggestions of a need for a 50 per cent hike in premiums or anything like it.
“I am most unhappy that the costs relating to private health insurance are not being addressed aggressively enough. But I assure the House that I intend to ensure costs decrease,” he said at the time.
He also commissioned a review to cut the cost of private health insurance and asked the Department of Health and the VHI to engage with actuarial experts Milliman to undertake it.
The report is to identify methods for achieving the multimillion euro savings a report produced last year claimed was possible, said the Minister.
Health Insurance A Year On The Up
VHI
A year of increases first saw the VHI increase its premiums by anywhere between 15 and 45 per cent in January followed by a 2 per cent increase on many policies last month.
QUINN HEALTHCARE
The second largest insurer in the market has also had two sets of increases this year. In April, the company announced average price increases of 6 per cent on all its policies, and earlier this month it announced rate increases of between 7 per cent and more than 20 per cent, which will begin to take effect from the beginning of next month.
AVIVA
In addition to yesterday’s price increase, Aviva upped its prices by 14 per cent in March and by a further 9 per cent in August.