Your Money

Conor Pope's guide on how to save hundreds on your health insurance

Pricewatch: Overpaying, finding the right plans, and the fear of switching insurers...

Conor Pope's face
Conor Pope
Mon Jan 15 2018 - 00:00

It’s not every page in every newspaper that can save you hundreds – if not thousands – of euro. However, we are pretty confident that by the time you have finished reading our rapid-fire health insurance questions and answer special, you will be equipped to save yourselves a whole lot of money – particularly if you have been reluctant to shop around in the past.

Do I really need private health insurance?
If you have a heart attack, a stroke, are involved in a car accident or have to be rushed into A&E suffering from some other ailment then health insurance is of little use. You will be taken to the nearest public hospital and treated in the public system at no – or at least at very little – cost. You may also find yourself stuck on a trolley for days even if you have been paying through the nose for your insurance policy.

So if treatment is free, why should I bother with it?
Many people don't. In fact around half the population don't have private health insurance. However, many people believe it is absolutely essential. This belief is only copperfastened by the endless stream of stories indicating our public system is not fit for purpose. The reality is that people with health insurance get access to consultants faster – even consultants working out of public hospitals if they are allowed see patients privately. They also get private and semi-private rooms in public hospitals and can avail of treatment in private hospitals which significantly reduces waiting times for many procedures – both elective and otherwise. We all know patients in the public system can be left waiting months, if not years, before they get to see consultants and people have died as a result of those delays. That is why many people believe health insurance is essential.

Okay, so, I can see that it has value but it is costing me a fortune. What was that you said about saving me thousands?
The plain and simple truth is if you have had the same health insurance policy for three years or longer you are wasting money. And it doesn't really matter which company you are with, that basic rule of thumb still applies.

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How much am I overpaying by?
That depends on many variables but the big one is the amount you are paying right now. If you have a gold-plated policy you could easily be paying thousands of euro more than you need to and you could switch to an identical – and in some cases better – policy either with your provider or with a rival and save a fortune. According to the price comparison website bonkers.ie, as many as 75 per cent of people with health insurance overpay by as much as 35 per cent a year.

Can you give me that in cold hard cash terms?
Around two million people have health insurance and, if we go by the bonkers.ie, figures, 1.5 million of those people are paying over the odds. If they are paying an average of just €200 more than they need to each (and many will be wasting a lot more than that), it means collectively Irish people spend more than €300 million each year than they need to.

But is health insurance not very complicated?
It is more complicated than it used to be for sure. There was a time when there was one health insurer in Ireland – the VHI – and it offered five plans running from A to E. Today there are hundreds of plans on the market with three key players in the space – the VHI, Laya Healthcare and Irish Life Health.

Why are there so many plans?
Why indeed. Insurers say they are always introducing new plans in response to consumer demand. A more cynical view has it that the companies benefit from making the sector harder to navigate for consumers. In fact, on a very basic level, it could be argued that they benefit to the tune of €300 million a year because confusion and fear are the main reasons people don't switch in search of better value more often. But that is not all. Insurance is a numbers game and the people crunching the numbers are very smart and they have put strategies in place to segment the market to allow them attract the most profitable customers and – inevitably – penalise the less profitable ones.

What do you mean by less profitable?
Older and sicker people.

How do they do that? I thought people could not be penalised if they were older or sicker?
They can't be. So what companies do is create differential pricing for targeted groups. You will find older policies popular among older people inevitably cost more while the newer cheaper policies restrict cover for ailments likely to afflict only an older cohort. Insurance companies also offer discounts to corporate clients. Under legislation all plans have to be made available to everyone but the companies are not legally obliged to tell people about their best deals so – unsurprisingly – they don't. Instead they roll out cheap corporate deals with confusing and off putting names, while many of the worst value options have easy to remember friendly sounding names.

Okay so I should switch but what if they start asking me questions about my health when I try to make the move?
Your new provider can only ask you three questions: Who are you currently insured with? What plan are you on? And how long have you been on that plan? It doesn't matter if you're planning to have a double hip replacement tomorrow, you can switch from insurer A to insurer B today, and insurer B becomes liable for the cost of the procedure. Pre-existing conditions are irrelevant once you already have a policy that covers the treatment.

But I know VHI and I trust it. I have been insured with it for years?
You are not alone. Familiarity is the VHI's friend but it is not necessarily your friend. While loyalty is to be commended it's not always to be recommended. If you are on what used to be Plan B or C or a version of that you are wasting money and better plans are available which cost less.

But what if I switch company and it disappears like Bupa or Glohealth did?
Bupa didn't disappear. It was taken over by Quinn and then became Laya. Glo Health is now Irish Life Health. All companies are equally safe. Even if a company were to disappear overnight, all outstanding costs would be covered and you could switch to an alternative without any loss of cover.

So I won't lose cover if I switch?
No. If you move from one insurers to another the new company must give you full credit for time spent with other insurers and they can not penalise you for prior claims. If you are switching to an equivalent plan, then you are fully covered immediately; if you upgrade your cover, then the additional benefits may not kick in for period.

How can I find the best plans for me?
The Health Insurance Authority website hia.ie should be the first stop. It has details of every plan on the market and a comparison tool that lets you see how your existing plan stacks up against other policies. Brokers are also worth considering. And you should ask your insurance company for information.

But what should I ask them?
Make sure your questions are very specific. Your calls will be recorded, so if they don't tell you the truth it is their head on the block. A good starting point is: "Have you any plans across your entire range - including your corporate plans - which are equivalent to the plan I am on and how much do they cost?"

You should also ask what cover you lose by switching. The key thing is to put the onus on them to explain everything. Do not allow them to fob you off with some line about sending you a brochure in the post for approval. Then the onus falls to you to read the brochure. If you don’t understand something or if it is even vaguely unclear, make them explain it again. And again. For as long as it takes.

What is the story with excesses?
Anyone who is struggling to cover the cost of their current plan needs to look at excesses. If you take on an excess on inpatient care in private hospitals and are prepared to pay a €2,000 shortfall for certain orthopaedic procedures, the cost of a policy can fall from more than €1,400 to about €800 a year. If you are in reasonably good health and can cut the cost of your cover by €600 by taking on some excesses, then you should look at that, but if you are in poor health or have a pre-existing condition, then taking on new excesses to save money is not something I would recommend.

So what kind of deals are out there?
We asked health insurance expert Dermot Goode of totalhealthcover.ie for some guidance here. He pointed to the snappily named VHI corporate plan PMI 3613 at €1,349 which he said was good value. He also suggested we look at Irish Life's Health Best Smart at €1,373 and Laya's Connect Care 100 €1,359 per adult. For people looking for something slightly cheaper, he suggested the VHI's Company Plan Plus Level 1.3 at €1,162 per adult or Irish Life Health 4D Health 2 at €1,273 per adult or Laya's Simply Connect which is €1,180 per adult

Goode says that how you engage with the insurers will determine whether you will get the best deal or not: “Always do your research first so that when you phone them, you’re asking for a specific plan or plans by name. Never ask them ‘what do you recommend”.

He advises people to “always check the following; hospital coverage; excesses; MRI scan centres near where you live; disclose any existing conditions or pending treatment; consultant coverage and upgrade rules. If you’re happy that the new plan meets your requirements, then switch”.

Anything else?
One very important thing. If you do switch, make sure you cancel the old policy once the new cover is in place. Paying for one policy is expensive, you don't want to find yourself paying for two!

Goode tips to cut the cost of health insurance

We asked Dermot Goode for his top tips to save money.

1. Check out a quality corporate plan, i.e. one which covers public and private hospitals with guaranteed refunds on your out-patient expenses with no excess to pay first. Remember you can join any plan irrespective of the plan name.

2. Take on a small excess which could reduce your costs by anything from €500 – €1,000 depending on the plan held. These excess are mostly per claim, not per night and they only apply to private hospital admissions

3. Split your cover, i.e. you can place each person on a different plan relative to their needs but all still remaining on the one overall policy. You can even split your cover across different insurers if needs be to maximise your savings.

4. Check out those discounted offers for child cover, e.g. VHI are offering 50 per cent discounts on the cost of child cover on 14 different plans - check out their One Plan Complete at €168 per child. Laya are offering free cover on the second and subsequent child on their Essential Connect Family which is a saving of approx. €240 per child. Irish Life Health are offering a discounted rate of €180 per child on their Nurture and Select Plus schemes. Splitting cover makes perfect sense here, e.g. put the adults on a good corporate plan and place the children on one of these discounted plans

5. If you have young adults on your plan (aged 18-25), make sure that you are getting young adult rates. Some insurers charge the full adult rate on certain plans but if you moved this young adult to a different scheme with "young adult rates", you could save anything from 10 per cent to 45 per cent depending on their age and the plan selected.

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