Laya hikes prices by up to 16.5%

Laya is to increase the cost of its health insurance premiums by up to 16.5 per cent from the beginning of April in a move which will see some households worse off by more than €200 a year

Announcing the price increases yesterday, the company insisted they were necessary and blamed Government policy for driving premiums higher.

The price increases will range from just over 6 per cent to 16.5 per cent, with the company putting the average increase at 10.8 per cent.

It is the second price hike announced by Laya in just three months. At the beginning of December, it increased the cost of policies by between 4 and 13 per cent.

“We are very conscious of the impact this increase may have on our members,” the company’s managing director Dónal Clancy said yesterday. He said “cost variables in the market which are outside of our control” were behind the latest increases.

“These are primarily the increases to the Government health levy, which VHI continues to benefit from, and the rising cost of providing medical treatments for our customers,” Mr Clancy said.

Mr Clancy pointed to an increase in the Government health levy from €285 to €350 per adult, and from €95 to €120 per child from March 31st and he noted that since its introduction as an interim solution to risk equalisation in 2009, the health levy had gone up by 119 per cent per adult and 126 per cent per child.

He claimed it would cost the company about €60m this year, an increase of €14m on 2012.

The rising cost of providing advanced medical treatments for customers, particularly in the high demand areas of oncology, orthopaedics and cardiac care, was also increasing. Laya’s spend on claims relating to cardiac treatment for 2012 was up 26 per cent on 2011 while the cost of claims relating to orthopaedic treatment last year was up 14 per cent on the previous year.

“We are operating in a fundamentally unstable market which needs radical reform in order to stem the tide of rising costs,” Mr Clancy said. “Our experience shows that the solution will need to be industry-led and benefit consumers equitably, providing a standard healthcare product, with a core set of benefits, for all.”

To balance rising costs and to help customers, the company was “protecting some of our most popular schemes”, he said. From the beginning of April, there will be a price reduction on the company’s Essential Plus schemes and it is also freezing the price of its Health Smart and Health Smart Family schemes.