Health insurance matters – even in the days of premium refunds

Switching insurers could easily save you hundreds of euro this year and next

It remains a fact that health insurance matters.  Photograph:  Gabriel Kuchta/Getty Images

It remains a fact that health insurance matters. Photograph: Gabriel Kuchta/Getty Images

 

The year just past managed to perform a neat trick by simultaneously proving the importance and irrelevance of private health insurance.

With the public health system coming under unimaginable strain as Covid-19 took hold, people in the fortunate position of being able to afford health insurance continued to have access to private hospitals, consultants and clinics and could avail of treatment for a wide range of conditions on both an in-patient and out-patient basis.

As long as they didn’t want access to any of those services in April, May and June when almost the entire network of private hospitals was effectively subsumed into the public system in order to cater for a much feared, but thankfully avoided, surge in Covid-19 cases at the outset of the pandemic.

It was avoided then but who knows might happen in the days and weeks ahead.

As a result of measures taken last spring, the three main players in the health insurance space – the VHI, Laya Healthcare and Irish Life Health – were forced to offer substantial refunds in recognition of the fact that much of what their customers were paying for was unavailable. Last month the VHI announced it planned to waive a further portion of premiums as a result of a drop in claims due to Covid-19 with adults due €75 back and a family of four set to receive €200 as a rebate later this month.

But while the health insurance sector was and continues to be in a state of flux the like of which could scarcely have been imagined this time last year, it remains a fact that health insurance matters.

It is also true that many of the 2 million or so people in Ireland with health insurance are heading into the busiest renewal period of the year and most of them will simply allow their policy to be renewed without asking too many questions of their provider. And once you miss the renewal window you are locked in for another 12 months.

People will stick with their providers despite the fact that if they have not reviewed their health insurance policy in the last three years they will almost certainly be wasting money by staying where they are.

Switching insurers can seem daunting not least because there are currently 314 different products on the market and choosing between them can be overwhelming but making a bit of effort now could easily save readers of this page hundreds of euro this year and next without the loss of any cover.

Premium rise

The Health Insurance Authority (HIA) says that more than a million people are due to renew their health insurance in the first three months of 2021 and consumers with policies almost certainly face another strong single-digit rise in premiums, according to benefits consultants Willis Towers Watson.

In a report released late last year the consultants predicted prices in Ireland will climb by between 5 per cent and 7 per cent in part due to the impact of Covid-19. That increase will come on the back of an average rise of 5 per cent in 2020 and 4.5 per cent in 2019.

Costs are rising for a range of factors – the increasing costs of treatment, ageing populations, and advancements in medical technology while the financial impact of the pandemic on healthcare providers is another factor, requiring increased numbers of medical staff, new procedures and PPE costs.

Rising costs are one reason why the switching market should be busy but it won’t be largely as a result of fear and confusion. With so many plans on the market it is a hard sector to navigate and many people opt to choose the devil they know rather than risking a loss of cover by making a switch. Unlike many other areas of the switching market, making a mistake might actually be a matter of life or death – or at least that is how many people see it.

Switching is not, however, that hard. Amongst the first things to remember is that people cannot be penalised based on their age and health and all plans have to be made available to everyone. And nor can companies pry into your state of wellbeing. When making inquiries they can really only ask you the following three questions: Who are you currently insured with? What plan are you on? And how long have you been on that plan?

Once you already have a policy, pre-existing conditions don’t even come in to it and 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 as long as you had cover for it with your previous insurer.

If you move from one insurer to another a new company must also give you full credit for all time spent with other insurers and they cannot 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 a period.

Dermot Goode is a health insurance expert with totalhealthcover.ie and he stresses the importance of switching or at least looking at alternatives before renewal. He points out that, as with car and home insurance, “you can switch back to your previous insurer again next year if you’re not happy with the new provider”.

Rules of thumb

He has some simple rules of thumb to work out if people are at least potentially over-paying for cover.

Among the red flags he identifies are policies which cost more than €1,800 per adult. “If you’re on the same plan for three years or more or you have all the family on the same plan,” is another warning sign.

He also says people should make sure they are on an up-to-date corporate plan and not to be on a dated cover. He also identifies some such policies: VHI Health Plus Extra, Family Plan Plus Level 1, Parent & Kids Option, Laya Essential Plus, Flex 125 Explore, Company Care Premium and Irish Life Healthcare’s Level 2 Hospital, Business Plan Complete and Business Plan Extra.

Among the other reasons Goode identifies as a reason for people to review their cover is if their plan is being retired – in this year’s case by the VHI. Among the plans it is phasing out are Health Plus Choice and Forward plan. He also says some VHI benefits are being reduced and may offer less psychiatric cover on certain plans while some Laya plans now include a 20 per cent shortfall on 13 restricted orthopaedic and ophthalmic procedures. He identifies .360 Care, 360 Care Select, Connect Choice, Care Select, Health Secure Plus but there are more.

He also says people should look to see if they are getting guaranteed refunds on out-patient expenses with no excess to pay.

The HIA 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.

We asked Goode for some specific policy recommendations but it is important to remember they should be considered a starting point for your own research and not an end point.

For an adult willing to pay about €1,200 he suggested the VHI’s snappily named PMI 5210 which costs €1,193, Laya Healthcare’s Inspire policy at €1,165 and Irish Life Healthcare’s 4D Health 1 which costs €1,176.

Goode says these policies “cover all public and standard private hospitals up to semi-private level with each claim in private hospitals subject to a small excess of €150-€200 per claim”. They have limited cover for the high-tech hospitals, such as the Blackrock Clinic and the Mater Private, and although the VHI and Laya plans include guaranteed refunds on eligible out-patient costs, the Irish Life Health plan includes a free personalised package but no guaranteed out-patient refunds.

The plans also include small excesses per private hospital admission and may include co-payments on certain orthopaedic/ophthalmic procedures. It is also worth noting that, while the prices are broadly comparable, that does not mean the policies are like-for-like in every respect which is why it is always worth looking closely at the benefits to make sure they work for you.

For someone willing to pay a bit more – between €1,350 and €1,400 – he listed three further policies. First was VHI’s PMI 3613 which costs €1,358 followed by Laya Healthcare’s Simply Connect Plus at €1,407 and then Irish Life Healthcare’s 4D Health 2 at €1,361.

There plans cover up to semi-private in private hospitals subject to a small excess per claim of €75- €150 per claim. They also offer limited cover for the high-tech hospitals and offer guaranteed refunds on a range of eligible out-patient expenses with no excess to pay first. Most of the refunds are in the order of 50 per cent.

Too many people ‘have little or no idea what they’re actually covered for’
Barbara Sheahan, the managing director of HealthCareCompare.ie, says she often finds that “people are unfamiliar with the terminology around health insurance and lack awareness into what benefits and coverage they could be entitled to with a different plan”.

She says that means too many people “have little or no idea what they’re actually covered for” and with about two-thirds of people likely to make a claim at some point many “could face some unwelcome surprises if [they] need treatment, only to find it’s not covered by [their] policy.”

She points out over the past year “personal circumstances have changed massively for many of us: a lot of people have lost their jobs and may now be struggling to make repayments for their insurance” but stresses there are “a number of ways you can reduce costs without needing to cancel your health insurance altogether”.

She encourages people to speak with a health insurance broker each year before deciding to renew existing policies. “There may be alternative plans available to suit your needs – and your budget – better than your current plan. There may also have been changes to your current plan over the past 12 months.”

She cites the example of Laya which has introduced co-payments for orthopaedic and ophthalmic procedures on several of their plans. “360 Care was a popular plan covering these procedures last year and now has a 20 per cent shortfall. Company Care Plus covers these procedures and has no excesses.”

She also suggest applying an excess to a plan can help reduce premium costs. “These excesses only apply to private hospitals and most plans offer excesses on a per stay basis, rather than per night. Generally speaking, higher excesses mean lower annual premiums.”

And as we have done on many occasions she points to the benefit of the corporate plan. “Many people are unaware they can access corporate plans as an individual – it doesn’t need to be through your employer or on a group basis. These plans are usually released for large corporate clients and will often offer the best value for money. Legally, all plans must be made available to everyone.

“However, insurers are not obliged to tell customers about these plans. Because such plans often have confusing names, they can be hard to find and off-putting for individuals.”

She also tells younger people to get insured before their 35th birthday. “When you take out health insurance at the age of 34 or younger, you only need to pay your premium. But if you’re purchasing health insurance for the first time after your 35th birthday, you will have to pay a ‘lifetime community rating’ loading.” And the older you are the more you will pay.

Panel: Will someone think of the children?

Given that there is free GP care for children up to the age of six and no children’s hospitals in the private system in Ireland, one long-standing question many people have is whether they need to pay health insurance premiums for their offspring at all. While it may not make sense to get them the same level of cover adults might get, if you can afford it, it can prove to be a great comfort, both financially and psychologically.

Children who fall ill tend to be typically treated in public hospitals, but many private hospitals will treat children as young as four and five for day procedures and having health insurance allows parents to circumvent the public queues, however unpalatable that may sound on the broadest of levels.

The Beacon Hospital in Dublin has a paediatric service which offers day-care and overnight procedures, covering general surgery, urology, dentistry and ophthalmology while the Mater Private has a team of paediatric consultants, surgeons and anaesthetists.

But while cover may be useful, the trick is to look at the cheaper policies offering cover for private hospitals unless your child has specific healthcare needs. While policies for children start at around €130 a year, cover for both public and private hospitals will likely not kick in unless people pay between €200 and €250.

One area where private health insurance can come into its own is with vaccinations. Most critical vaccinations are taken care of by the State when children are infants but elective vaccines, such as the one for chickenpox or Meningitis B (which was only introduced as standard for children in 2016) cost between €140 and €300. A good health insurance plan for children will cover between €30 and €60 of the vaccination cost.

Panel: Top tips to switch and save

Don’t leave it until the last minute and shop around well in advance of renewal or have a trusted family member or friend help you. The savings could reach €1,000 each year depending on the plan held.

While comparison websites are a useful guide, they are only that. If in doubt, seek independent advice and let someone else do the heavy lifting for you.

Don’t be afraid to switch. It’s just an insurance policy and if you ask the right questions and you’re happy with the answers, switch and save. There is no reward for loyalty in health insurance.

Split your cover and consider the needs of each person on the policy and insure them on whatever plan matches those needs. You don’t need to have everyone on the same plan or even insured with the same insurer.

Check out the special offers, such as free cover for children under 18 with one insurer.

Check out the corporate schemes which are available from each insurer as they include guaranteed refunds on eligible out-patient expenses which is not included on many dated schemes. Remember, you can join any plan on the market.

Still not sure you’re on the right plan; just phone your insurer and ask them if they have a lower-cost equivalent to your existing plan. What you are looking for is a similar benefit plan at a lower cost. You can also put the same question to the other insurers as well before you renew. Have them check all their plans, especially their best corporate plans.

If it is the case then make sure the insurer knows that you don’t mind taking on a small excess to reduce the cost.

Do everything over the phone and whatever alternatives they suggest, have them confirm what you are losing and gaining.

Disclose everything to them in terms of existing conditions and likely treatment to get specific answers to all your queries.

Ignore any items that are on the plan which may not apply to you such as maternity, psychiatric, convalescence, etc. By law they must be included on all plans.

And if you’re able to generate some savings, consider topping up your cover with a DeCare Dental plan or a cash plan from HSF Health Plan.