Less than half of population has private health insurance

THE NUMBER of people covered by private health insurance has fallen below 50 per cent for the first time in many years, new official figures reveal.

The new figures also show that the share of the market controlled by the VHI, the country’s largest health insurer, is continuing to contract.

On the other hand, Aviva has performed strongly in the market over the 12 months to last September.

The new official figures, presented by the industry regulator, the Health Insurance Authority, to the Department of Health in November, show that the number of people covered by private health insurance fell by about 6,000 between the end of the second-quarter of last year to the end of the third-quarter in September.

The number of people with private health insurance cover has been falling steadily since the onset of the recession.

This means there were about 2,227,000 people with private health insurance cover at the end of September compared with more than 2,260,000 nine months previously at the end of December, 2009.

A report given by the Health Insurance Authority to the Department of Health in November states that the percentage of the population with health insurance fell from 50 per cent to 49.8 per cent between the second and third quarters of 2010.

The Health Insurance Authority report also states that at the end of last September, the VHI had 61.8 per cent of the market.

This is down nearly two percentage points on the figure for September 2009 when it had 63.7 per cent of the market share.

Over the same period – from September 2009 to September 2010 – Aviva’s share of the market increased from 10 per cent to 12.8 per cent.

The share of the health insurance market held by Quinn Healthcare declined from 22.4 per cent in September 2009 to 21.8 per cent in September 2010.

Last May the Government announced plans for a radical shake-up of the health insurance sector.

This included making a substantial capital injection into the State-owned VHI to allow it to achieve authorisation by the financial regulator.

The Government also announced that when this was secured, the company would be sold to the private sector.

The precise level of State investment is unclear but the Minister for Health, Mary Harney, has suggested that on its own, increasing VHI’s level of reserves from the current 20 per cent of premium income to 40 per cent could require funding of €338 million.

However, the Government believes this figure will fall considerably if the company avails of reinsurance – in essence if it passes on some of the risk.

As part of the Government’s health insurance reforms, it said it would introduce new regulations governing the minimum benefits which companies in the market must provide. This is expected to stipulate that GP services as well as measures such as some forms of health screening will have to be covered. New penalties will also be put in place to encourage people to take up health insurance earlier rather than later in life.

The Government has also told the VHI that it will have to open up its travel insurance scheme – currently available to its subscribers – to everyone.