THE VHI has been accused of altering the prices of some policies to make it more difficult for families to make potential savings of more than €1,000 by switching to corporate plans.
Despite their name, corporate plans are available to all subscribers but insurers are under no obligation to market them as such. The price of one corporate plan offered by the VHI is going up by 80 per cent from later this month in a move which health insurance experts have warned will cut people off from substantial savings.
On February 22nd, the VHI released a corporate plan called PMI 0611. It has been described as a “fairly standard offering in terms of benefits” and is, broadly speaking, comparable with the company’s Plan B policy.
The big difference was price. When the policy was launched it had an annual premium for an adult of €711, a student policy cost €244 and a child’s premium was €111. An adult with Plan B was paying €1,224, a child cost €295 and a student premium was €443.
Under the VHI’s Parents and Kids Plan, an adult premium stood at €1,043, while a child cost €226. To put the numbers into perspective, a family of two adults and two children with the corporate plan would have paid €1,644 compared with €3,038 for a family on Plan B.
The VHI increased the prices of the corporate plan in March but on May 15th, the prices hikes were reversed and the cost returned to what it initially was.
This week, however, the VHI announced it was increasing the cost on June 23rd, this time by 80 per cent, which would make it one of the largest single policy increases since the health insurance market was deregulated in 1994. From that date, the premium for an adult with a PMI 0611 plan will be €1,279, a student will pay €439 and a child will cost €200.
“Why would the VHI introduce a new plan and then see the need to increase its premium by 80 per cent in the space of four months?” asked Patrick Brennan, a health insurance specialist with the Irish Health Insurance company.
He said the pricing moves could be used to attract large corporate schemes and then “once the company has been sold on the benefits, the VHI might readjust prices so the plan becomes bad value for money and unattractive to the general public”.
Industry sources said yo-yo pricing was becoming increasingly common – Quinn Healthcare and Aviva have also both offered substantially reduced prices aimed at targeting big companies before increasing them again when a deal has been done.
A VHI spokeswoman said promotional offers were “now a feature of the private health insurance market”. It was indicative of a “competitive marketplace” and she stressed that all products were available “to any customer wishing to purchase them”. She said PMI 0611 had just over 4,000 subscribers and the price change would only affect new customers choosing this plan on or after June 23rd.
A spokesman for the Health Insurance Authority said the practice was legal once it was given 10 days’ notice and the prices of any particular policy remained consistent for at least 30 days.
