Navigating the health insurance maze and finding the best deal

If you are one of the more than a million people in Ireland who have had the same health insurance policy for more than three years you are almost certainly wasting money. With hundreds of thousands of policy renewals coming up in the weeks ahead, now is the time to act or else risk being locked into a bad-value deal for the next 12 months.

Before we come to the savings we need to acknowledge that there are tough times for people in need of healthcare.

The public system has been struggling to cope with the demands being placed on it – when has it not struggled, you might well ask – over recent years while those who can afford insurance have been hit with increases much higher than the rate of inflation.

Over the course of last summer all three health insurers in Ireland rolled out price hikes of up to 6 per cent, with all three blaming the increased cost of medical treatment in Ireland.

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According to the Mercer Marsh Benefits 2019 Medical Trends Around the World report published a few months ago, medical inflation here is outpacing general inflation at a rate of six to one, with the higher price of advanced healthcare likely to lead to more health insurance hikes in the years ahead.

That report suggested that underlying medical costs in the Republic rose by 4.2 per cent in 2018 compared with a general inflation rate of just 0.7 per cent. It added that costs were expected to increase by a further 4.5 per cent in 2019 compared with an inflation rate forecast of 1.2 per cent.

Despite the price hikes more people are taking out health insurance and according to its most recent report on the state of the sector, the Health Insurance Authority (HIA) said that more than 2.2 million people now have policies, which is broadly in line with the numbers seen at the height of the Celtic Tiger boom.

But do we actually need health insurance?

If you are unfortunate enough to have a heart attack or stroke, are involved in a car accident or have to be rushed into an emergency department 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.

The public system can be excellent in this country and that is largely down to the medical professionals who run it, but it is a long way from perfect. Even with health insurance people can find themselves stuck on trollies for days even if they have been paying through the nose for insurance.

However, the reality is that people with health insurance get access to consultants more quickly – 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.

Another reason many view it as essential was contained in a report from the Economic and Social Research Institute which found that wealthier people with private health insurance are more likely to avail of potentially life-saving cancer screening tests in Ireland.

The think-tank study looked at the uptake of breast and prostate cancer testing among middle-aged and older people and said people with neither private health insurance nor a medical card were “significantly less likely to have received a mammogram or prostate screening” than those with just a medical card.

In their report, researchers Sheelah Connolly and Richard Whyte said their analysis "found a strong relationship between private health insurance and the uptake of cancer screening services. This is somewhat surprising given that, in general, private health insurance does not offer an advantage in accessing these services."

An issue that needs to be dealt with – although it seems intractable – is the removal of private medical practice from public hospitals. A report published last year found that taking privately insured patients out of public hospitals would lead to higher taxes – because the insurance income funds so much of the public system – while leading to but lower health insurance premiums.

The chairman of the expert group that examined this issue for the Government, Dr Donal de Buitléir, told an Oireachtas committee that almost 30 per cent of total hospital activity was funded privately – "a situation comparable only to the US".

“The main element of this is the private income of hospitals [now just over €500 million] paid mainly by insurers. This income is declining in any event due to the campaign by insurers to inform patients that they gain no advantage from using their insurance when admitted via the emergency department of a public hospital.

That is the context but what most people care about as renewal time approaches is whether they can save money while keeping the cover they have.

The good news is they can. While prices are climbing there are ways to save money. 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.

Do not allow them to fob you off with some line about sending you a brochure in the post for approval

The reason why as many as 70 per cent of the 2.2 million people with health insurance don't switch is fear and confusion. It is certainly more complicated than it used to be. There was a time when there was one health insurer in Ireland – 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 – Vhi, Laya Healthcare and Irish Life Health.

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 of that confusion and fear that stops people switching in search of better value more often.

Websites worth consulting

When it comes to switching the first thing to remember is that people cannot be penalised based on their age and health.

All plans have to be made available to everyone but there is a but. 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.

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. Dermot Goode of totalhealthcover.ie is one such person.

He says that when people are looking for better value they should be prepare to ask their insurance company for as much information as they need to make the right decisions.

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.

Goode says that if a person takes on an excess on inpatient care in private hospitals and are prepared to pay a shortfall for certain orthopaedic procedures for example, 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.

When asked for specific plans, Goode says people children under 18 should check out Vhi, which is offering cover at €226 per child on their One Plus Plan. Irish Life Health have a great deal on their Benefit Plan at €190 per child. Laya meanwhile is offering free cover for the second and subsequent child under 18 on the Essential Connect Family, Essential Health 300 and their Flex 125 Explore schemes.

“Many older members are still insured on very dated plans costing in excess of €2,500 per adult and they stand to make the biggest savings from shopping around,” he says. “We see more siblings now reviewing cover for elderly parents to help them generate much needed savings.” When asked for a sample of some ‘private room’ corporate plans across all three health insurers, he points to Vhi’s Company Plan Extra Level 1, which costs €1,670 per adult. There is also Laya Healthcare’s Care Select, which costs €1,556, and when it comes to Irish Life Health he points to 4D Health 4, which costs €1,587.

Remember, if you are making inquiries your new provider 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? 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.

If you move from one insurer to another the new company must give you full credit for 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.

Seven steps to take

We asked health insurance expert Dermot Goode of totalhealthcover.ie for some guidance.

1: Ask for the nearest equivalent plan to what you have already that is lower in cost.

2: Advise the insurer that you don’t mind taking on a small excess to reduce the cost.

3: Have them check all their plans, especially their best corporate plans.

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

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

6: 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.

7: If you’re happy that the new plan meets your requirements, then switch and save.

Readers’ experience

We also asked people what their views of the health insurance market and switching was. Here are just some of the responses.

"Changed Vhi to Irish Life, paying a bit more but overall better benefits and the claims we've made have well paid for the fee increase," says Claire Cluskey Paul. "Was reluctant to change due to wait periods but happy now that we did. Used a broker to help figure it out as it's hard to compare plans."

Jonathan Brazil says he had "tried to take it out multiple times and failed because I can't get a clear picture of anything on offer. It's impossible without taking a leap of faith and far too expensive for a leap of faith."

“I don’t have it but my dad does,” says Cora McNabb . “Made no difference to me in getting a serious diagnosis,” she added, although she did pay €400 to get an MRI done privately rather than wait two years. “I also got private room in hospital by chance.” Her father’s insurance “made no difference to the quality of care dad got following cardiac arrest”.

By contrast, Mike Mc Loughlin says he found the whole process "simple". He suggested people start at the Health Insurance Authority website and look for "the best deal and call and ask for it. People don't realise that you can ask for the same discounts/benefits that are afforded to group discounts as the health insurance companies don't advertise these packages."

Diarmaid Mac Aonghusa says he changed and "saved a fair bit. Had to have a long call with them while they tried to convince me of the value of more expensive plan. Almost as hard as cancelling Sky but not quite!"

Samantha Langan says she tends to change "almost every year". She says the "cost of the current policy goes up every year so I tend to change either between Irish Life and Vhi or within one of them, change plans without ultimately losing out on what I want out of the plan for my current life stage and health."

Fergal Beattie says he knows of someone who says “he’d drive around the country without car insurance before dropping health insurance. He’s a doctor in a hospital. Unfortunately I’ve seen both ends of the system and our public health system is currently in crisis”.

"With Vhi years, happy with service to be honest," says Roseanne Richard. "I would be reluctant to change providers due to to pre-existing conditions though. This year we had to cut back and saved hundreds by cutting out on the day-to-day expenses cover on the policy."

And, finally, this longer piece from Wesley Dawson.

“We have health insurance and pay over €3,500 per year for the family (two adults and two kids); however, we never seen any benefits from having it. The only reason we got it was the fear factor, the ‘What if we didn’t have it and something goes wrong’ combined with me turning 35 and the additional costs they would put on me for never having insurance before.

“So here I am at 38 having never used or seen the benefit of having health insurance, yet I continue to pay for it because of the fear of the great ‘what if’. We still pay for the doctors and A&E visits and – touch wood – we haven’t had to spend any time in hospitals yet.

“We did have to go to A&E about three times In the three years and as far as we could see they get us to sign the form to make sure they get extra money from the insurance, but thankfully all trips to the A&E were sorted out on the day and we know we would have got the same treatment whether we signed the insurance form or not.

“I don’t believe in insurance, but can see why they are in place. If I lived in America I would definitely see why having it is necessary but here in Ireland it’s a joke – sure Kilkenny (our local hospital) doesn’t even have any private beds and by the hospital’s own admission to us on a recent A&E visit they said they couldn’t give us anything different than a medical card holder or non-insured person seeking care: same beds, same doctors, same care.

“So from 18-35 I managed to save €3,500 per year; now I’m just giving it to the Vhi for peace of mind.”