THE NUMBERS covered by private health insurance are falling and the decline is likely to accelerate, the regulator has told the Department of Health in an internal report.
The Health Insurance Authority said numbers with health insurance fell in the first quarter of the year for the first time since quarterly figures began to be compiled in 2001.
The figures show that in March 2009 there were 2,286,000 covered by private health insurance, or 51.7 per cent of the population.
This represented a small reduction of about 13,000 people on the figure for December 2008 when there were 2,299,000 people or 52 per cent of the population with such cover.
The authority linked the decline to rising unemployment and forecast a further deterioration in the months ahead.
It said long-standing research on health insurance showed that one of the main determinants of demand was whether people were in work or not.
“It is very probable that the economic crisis and the resulting major fall in employment will lead to a fall in numbers with health insurance, even allowing for intense marketing activity and other determining factors,” the report noted. “The most reasonable projection is that the falling quarterly trend will gather pace as the year progresses and continue into 2010, when account is taken of recent economic forecasts.”
The authority report supports comments made by the largest health insurer in the State, the VHI, which last month said its subscriber base was falling.
The VHI said has lost 40,000 members in the first three months of the year. The company blamed the decline on the recession and consequent job losses.
However, the VHIs two main competitors, Quinn Healthcare and Hibernian Aviva Health said that despite the recession they had gained more members than they had lost so far this year.
Quinn Healthcare said at the weekend that despite the recession and decline in the sector, its business was expanding.
It said that its subscriber numbers stood at 505,000 members having passed 500,000 in April.
Quinn Healthcare general manager Donal Clancy said the the company had seen a 50 per cent increase in transfers from other insurers for 2009.
In its report to the department, the authority noted that while insurance coverage was linked to employment, the rise in the number of people with such cover last year at a time of rising unemployment could be explained.
“Firstly, a significant average time-lag has been observed in the past between changes in the aggregate employment trend and demand for health insurance.
“Secondly, competitive and marketing activity in the health insurance market has been intense in 2008 with relatively large amounts of money spent on advertising,” it noted.