Do we really need private health insurance?

 

HEALTH COVER :An expensive comfort blanket in case you fall ill or a luxury you can no longer afford? Recent hikes in health insurance policies are making more and more consumers reassess whether they really need private health insurance

SAY WHAT YOU like about the VHI, it has a woeful sense of timing. Most companies with bad news to announce at least try to slip it out during a major news event or in the run-up to a holiday when our attention is elsewhere or, at a minimum, on a Friday evening so some of the story’s heat can dissipate before Liveline cranks up again the following Monday.

No such clever chicanery for the State’s largest private health insurer. It announced its latest price hike on a Thursday morning in early January, when there was nothing newsworthy happening anywhere in the country and everyone was a little bit grumpy.

The VHI did try to manage the story by topping its press release that morning with the news that the majority of its customers would be hit with a 15 per cent price hike. If 15 per cent sounded like a lot – and it did – it was small beer compared to the 45 per cent price increase that is to be imposed on holders of Plan B Options policies who renew after February 1st.

It took the journalists assembled in the VHI boardroom, when the hikes were announced, about 15 seconds to see through the 15 per cent ruse. The public reacted furiously to the massive increases and the VHI switchboard was jammed for days as people tried to get through to cancel policies, move their renewal dates forward to offset the price hikes for at least 12 months, or drop down a policy rung or two.

The number of people contacting the Health Insurance Authority increased by up to 2,000 per cent over the same period.

Calls to the lesser-known Hospital Saturday Fund (HSF) increased by 500 per cent. It can expect to be a major beneficiary of the price hikes. The HSF is not a replacement for health insurance and is not a health insurer in the traditional sense. It does not offer blanket cover for hospital stays but may prove to be an affordable safety net for some people at a time of crisis.

What it does is give cash back to policy holders to offset some day-to-day “out-patient” expenses. This includes GP fees, prescription costs, consultant and dental fees, and physiotherapy visits, as well as grants for hospital stays, birth grants and worldwide accident cover. It has just over 100,000 members in the Republic.

“At first, we saw a three-fold increase in calls but that increased even further and I would say that this week we have seen a 500 per cent increase in the number of calls we are getting,” Roy Smith, chief executive of the HSF told Pricewatch.

Even before the recent price hikes, these hard times were proving to be good times for the HSF – it saw a rise of over 20 per cent in new members last year, compared to the previous year – the private health insurance market fell by around 5 per cent over the same period. Smith says cash plans now play an important role in the provision of healthcare in Ireland.

“Those who cannot now afford private medical insurance (PMI) can still manage to pay towards a health cash plan, which provides much-needed help towards healthcare expenses that cannot be avoided. Those who do have PMI can take out a cash plan to complement their private scheme and thereby cover almost every health eventuality.”

He points out that many people don’t realise that if they get seriously ill and are hospitalised, it tends to be in a public hospital and they are covered by the taxes they pay.

“A major difficulty for us is getting our message out there. The private health insurance companies have huge marketing budgets and are advertising on the radio and television. We cannot do that and often we rely on word of mouth”.

The HSF has a range of payment options that should be very attractive to people with and without health insurance.

Payments into its personal scheme start from €9.50 per month, rising to €55 per month for maximum cover. Someone paying €55 per month will get back half their dental and optical expenses, up to a maximum of €550 a year; €32 per GP visit; €16 for every prescription filled and half the cost of visiting a specialist up to a maximum of €1,200. Grants for overnight stays in hospital range from €20 to €120, depending on the size of the premium.

Subscribers can claim this cash back even if all their medical expenses are covered by private health insurance as well, so being sick can actually make you money. Or more realistically, go some way towards covering the “out-of-pocket” expenses which mount when a family member is hospitalised, not least overnight accommodation, meals and parking charges.

Smith says many callers in recent days have had private medical insurance “but they are telling us that they simply cannot afford it any more. The limit of affordability has been reached for many people. We have to face the fact that many of our 100,000 members would have no cover at all were it not for us.”

HEALTH INSURANCE WHAT IF I JUST WENT WITHOUT?

MANY PEOPLE are asking if they need health insurance at all and the argument against getting it is convincing. If you have a heart attack, a stroke, are involved in a car accident or are rushed into A&E, health insurance is of little or no use to you – you are taken to the nearest public hospital and treated in the public system at no cost.

SO WHAT IS IT GOOD FOR?

It comes into its own when it comes to private and semi-private rooms in public hospitals and any stays in private hospitals. Hospitals like the Beacon Clinic, the Galway Clinic, the Mater Private, St Vincent’s Private and the Blackrock Clinic are all but completely out of bounds for people without private health insurance. These hospitals have a very important role to play in our health care sector and provide a vast array of treatments, ranging from life-saving to cosmetic and all points between. The reality is that private health insurance gives access to more hospitals and more treatments and so can significantly reduce waiting times for certain procedures.

WHAT ABOUT SEEING CONSULTANTS?

The argument that health insurance is essential to gain access to consultants fast is less convincing. It is well documented that patients in the public system can be left waiting months, if not years, before they get to see a consultant. People have died as a result of these delays. The disastrous consequences of being left waiting by the public system are, of course, terrifying, but private consultants are not exclusively for people with health insurance and you can always pay one in cold hard cash and avoid the long wait.

WILL THAT NOT COST A FORTUNE?

While the cost of seeing a consultant depends on who they are, where you are and what is wrong with you, a consultation with a doctor privately should cost no more than between €150-€300. Even with some bells and whistles policies you still have to stump up significant amounts of money to see a consultant privately for the first time. And many policies also have excesses which you might be hit with charges every time you visit a consultant.

WHAT IF I AM DIAGNOSED WITH A SERIOUS ILLNESS?

While it does not cost that much (and we’re talking relatively, here) to see a consultant privately on a one-off basis, ongoing visits can quickly bleed a patient dry.

A by-pass in a private hospital will cost around €20,000, a course of the anti-cancer drug Herceptin costs €32,000, and some private hospitals charge over €2,000 for a bed for a night. Such prices are clearly beyond the majority of people without private health insurance.

If you are diagnosed with a serious, life-threatening condition and you do not have insurance, you will have to be treated in the public system. While you can reasonably expect to be treated expeditiously for serious conditions – for all its headline grabbing flaws, there are a lot of very talented and hardworking people on the frontline of our medical service – there are longer waiting lists. If everyone dropped their health insurance, the lists would double or treble overnight. Almost 70 per cent of VHI policy holders are treated in private hospitals.

WHAT IF I AM DIAGNOSED WITH A SERIOUS BUT NON-URGENT CONDITION?

This is a real problem if you do not have health insurance. If you are diagnosed with a relatively minor condition – anything from a blocked artery to a non-functioning hip, so the word minor is relative – and go onto a public hospital waiting list, it could be a very long time before you get treatment. The private system provides access to a wider array of hospitals and gives greater choice and faster treatment.

WHAT ABOUT MY CHILDREN? DO I HAVE TO HAVE COVER FOR THEM?

While it may be counter-intuitive, paying health insurance for children under 18 makes less sense than paying for it for yourself, largely because there are no private childrens’ hospitals in the State.

Children can obviously be seen by private consultants at a cost, the actual hospital care is done in the public health system. While it is worth having some cover for them, it is madness to have them covered under the most expensive policies.