Laya Healthcare announces insurance price hike
Company claims public hospital bed charges are responsible for the increase in costs
Dónal Clancy, managing director of Laya Healthcare. File photograph: Jason Clarke Photography
The cost of health insurance for thousands of Laya Healthcare customers is to go up by an average of 7 per cent from the beginning of July, the company has announced.
The company is the State’s second largest health insurer and has more than half a million members.
It blamed the price increase on public hospital bed charges for private patients, saying they were “driving an unsustainable spike in the cost and volume of claims”.
It said the increased volume and cost of private and public hospital claims arising from the public bed re-designation charge, which was introduced for private patients in 2014, was driving the bulk of the price hike.
It said the charge had resulted in those with private health insurance being charged up to 11 times more for a public hospital bed compared with a public patient.
While in public hospitals, people with private insurance are being asked to sign a waiver form which allows the hospital to seek up to €813 per night from private health insurance companies for the patient’s stay, regardless of the type of accommodation on offer.
The public patient charge for a public hospital bed is €75 per night.
The company said Irish residents were entitled to public hospital cover and pay for this cover through taxes.
It said that “charging a huge difference in the cost per night to private patients who occupy a public bed with no additional services is inequitable”.
Laya claimed the charge was effectively a double payment for private health insurance patients and was driving private health insurance premiums up.
It said that, when first implemented, the government said the charge would generate an additional revenue yield for the hospitals of no more than €30 million.
However, two years on, the actual cost incurred by health insurers is in excess of €100 million, which Laya said was “an unfair and wholly unsustainable burden to health insurers, and more critically, to the 2.1 million people who have invested in private health cover.
“Two years after being introduced, we are only now seeing the full financial impact of the public hospital bed charges come through in our analysis,” said Laya’s managing director Dónal Clancy.
“The large increase in our claims’ costs can be explained by the additional revenue generated by the public bed re-designation charge, which in turn is creating an upward pressure on the cost of premiums.
“Unfortunately it is the patients who are losing out, specifically those who have invested in private health insurance, as they are paying for services that are not being delivered.
“This has led directly to the price increase on some of our schemes today.
“While we have tried to minimise the impact of this price adjustment across our schemes, these charges are unsustainable if we are serious about addressing the affordability of health insurance.”
He called on the new Minister for Health, Simon Harris, to address the issue of public hospital costs “as soon as possible”.