Consumer Health:If you are facing into another year of wage cuts and job losses, shop around for private health cover rather than drop it, writes Fiona Reddan
IF YOU have lost your job and with it your work-sponsored health insurance policy, or are feeling the pinch like so many, you may be finding it difficult to meet the costs of maintaining your private health insurance cover.
This should come as no surprise given that the cost of private health cover has been on an upward trajectory for the past few years, and shows no sign of abating. Most recently, Quinn Health became the latest insurer to drive up prices when it announced a 15 per cent average increase in its prices for 2010. This will see the cost of its Essential Plus product jump from €715 to €778.
Moreover, a doubling of the health insurance levy, from €160 per adult to €320, is also thought to be on the table. If introduced, health insurance prices would rise further.
Rather than cancelling your cover, which means that you will have to endure a waiting period before you will be protected when you take out a policy again at some time in the future, your first move should be to shop around among the various health insurers to see if you can cut costs.
“It is still possible to go between the three insurers and find an equivalent plan at a lower cost,” says Aongus Loughlin, head of healthcare and risk consulting with Watson Wyatt.
Quinn’s most recent price hike applies only after December 31st so there is still an opportunity to lock-in at lower prices for 2010.
Kevin Kinsella, senior healthcare consultant with Mercer, recommends choosing a plan with an excess as another option. Like your home insurance policy where you may agree to pay the first €100 of any claim yourself, a health insurance policy with an excess can reduce overall costs – unless of course you find yourself in a position whereby you have to claim very frequently.
Kinsella estimates that by choosing an excess option, which is available from all three insurers, you can save yourself about 10 per cent of the cost of the premium.
For example, if you are currently on VHI’s Plan B, it is costing you €828 a year. If you choose the excess option however, you will get the same level of care, but it will cost you €76 less a year, provided that you’re willing to pay €75 towards the cost of each stay in a private hospital.
You could also consider splitting your policy, by keeping adults on more expensive packages and downgrading children. As Kinsella points out, children don’t need access to private hospitals as when they’re sick it’s a public facility, such as Tallaght or Temple Street Children’s Hospital, that they attend.
This can result in significant savings. For example, at Quinn Health the cost of a child on its Essential Plus plan is €274. However, by downgrading to Quinn’s Essential plan, which offers cover only in public hospitals, you could save €119 per child.
A third option is to downgrade your cover. For example, you may currently have a policy which covers the cost of a private bed in both public and private hospitals, but no longer feel this is worth the extra expense – particularly given that your insurance doesn’t guarantee you a private bed.
“By law, all health insurance providers must cover medical treatment in public hospitals, all you’re paying more for is a better bed/better type of hospital,” notes Loughlin, and he says that even by reducing your cover to the lowest possible level, it will still give you a safety net in case you need to see a consultant privately.
Given the length of public waiting lists, the ability to see a consultant privately can significantly shorten this wait.
As Kinsella points out: “The main reason people buy private health insurance is access to care.”
So, you could consider pulling back on your cover for a private hospital for the time being, and look instead for a product which covers you fully in a public hospital, offers some cover for a private hospital, and also provides some money back on everyday medical expenses.
Instead of VHI’s Plan B then, you could downgrade to VHI’s First Plan, which gives you full cover in a public hospital, plus 50 per cent cover in certain private hospitals, as well as cash back on a host of outpatient expenses, such as €25 per GP visit. This would save you €188 a year. The plan also offers a proportion of costs incurred in a private hospital back.
Other options would be to downgrade from Quinn’s Health Manager to its Personal Care product, at savings of €289, or from Hibernian’s Level 2 Everyday plan to Level 1, which would save you €170 a year. One note of caution however. You should be aware that if you downgrade and then decide to upgrade at a later date, you may have to endure waiting periods for the services covered under the more expensive policy.
Another option is to consider cover with a health cash plan, such as the Hospital Saturday Fund (HSF), which offers a cash grant towards numerous medical expenses at a lower annual charge.
For example, for €246 a year you can get cover which includes up to €260 a year back on dental and optical charges, €780 on consultancy fees and a birth grant of €400.
However, the plan does not offer any contribution towards GP charges. More significantly, it has limited hospital cover, and will contribute only €64 a night towards hospital charges, which would make only a tiny dent in the cost of a stay in a private hospital or a private bed in a public hospital.
Other products which cover day-to-day costs are also available from VHI and Hibernian Health, but again, these products don’t give hospital cover.
And, while Loughlin concedes that, “on average, Irish people spend one night a year in hospital, but make five trips to a GP”, he warns against dropping hospital cover.
“By all means concentrate your plan on getting day-to-day cover, but at least have a minimum of care in a public hospital.”
