More expected to abandon private health cover


MAIN POINTS:A TOTAL of 75,000 people will have dropped their private health insurance cover between last summer and the end of this year, the Health Insurance Authority has estimated.

The authority, the regulator for the sector, said yesterday that at the end of March 2.14 million people were covered by private health insurance – the same level as in mid 2006.

This is down from 2.3 million subscribers at the peak of the market at the end of 2008.

It emerged yesterday that the authority had warned the Minister for Health James Reilly, in a document last December, that the number of people covered by private health insurance could fall by a further 75,000 in the 18-month period running from June 2011 and the end of 2012.

Chief executive of the authority Liam Sloyan confirmed this was reported to the Minister.

The authority warned that the market was vulnerable to a cycle of increasing premiums, leading to more cancelled policies, resulting in further premium rises.

Separately yesterday the authority published a survey which suggested consumers continued to believe private health insurance cover was a highly-valued commodity.

Mr Sloyan said there was a strong desire among the public to have health insurance cover but that many people found it a strain to keep it due to levels of affordability.

He said the survey found health insurance subscribers were becoming more active in shopping around.

He said tolerance for price increases had reduced sharply. The survey found one in two health insurance policyholders believed that “increases are inappropriate and are not justified by the cost of treatment and services”.

The survey report said this pattern was compounded by the fact that fewer than two in 10 believed price rises were appropriate given the cost of treatment and services.

“This is half the number who agreed increases were appropriate in 2009 and far below the 44 per cent who agreed back in 2002.

“In previous years of the survey, policyholders were quite evenly balanced in their views towards policy increases. This is no longer the case and policy hikes are now facing much greater negative responses.”

The survey also found 23 per cent of those with private health insurance had switched insurance provider.

“The great majority of these switchers have only switched once (82 per cent) and most of the movement is away from the VHI (72 per cent), with a further 21 per cent coming from Quinn Healthcare and only a small number from other providers.”

The study also found that 20 per cent of those who had never switched companies had considered doing so.

The report said the overwhelming reason for switching, among those who have done so, was for cost savings, “underlining the primacy of price consideration over issues of cover in determining switching behaviour”.

However, the report said that people with health insurance cover would need to save an average of €441 to prompt them to switch provider.

Main points

* 50 per cent of those who cancelled health insurance cover said premiums were too high or they could not afford it

* 23 per cent of consumers have switched providers

* 60 per cent of those in workplace health insurance schemes now say their employer makes no contribution to the cost

* The number of those who believe health insurance is a necessity not a luxury has fallen from 67 per cent to 59 per cent

* Only 20 per cent of people agree there is no need for private health insurance as public services are adequate