Patients left out of pocket over health insurance confusion, says ombudsman

People are being left out of pocket for sometimes expensive medical procedures because of confusion over the extent of their private health cover and the nature of pre-existing conditions, according to the financial services and pensions ombudsman.

In a report focusing on private health insurance published on Tuesday, the acting ombudsman, MaryRose McGovern, said it was important that consumers understood the extent of their health insurance cover and the waiting periods that could apply for new cover or after an upgrade of a policy.

“We are approaching the time of year when many people will be thinking about reviewing or renewing their private health insurance, or indeed perhaps switching providers, particularly in light of the current cost-of-living pressures,” Ms McGovern said. She noted that private health insurance – costing on average €1,410 per adult annually – “can represent a significant amount of a household’s budget”.

“It is vital that consumers take some time, before starting the renewal process, to make sure they understand the impact of any decisions they make in upgrading or downgrading their cover,” the acting ombudsman said.

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She said the more than 300 plan options across different providers meant there was “tremendous choice, but it can be a challenge to select the best level of cover to suit individual needs”.

Market research undertaken by the ombudsman’s office found that just 15 per cent of private health insurance policyholders felt they had a good understanding of the cover of their specific plan, with 27 per cent saying that they had only a poor understanding of their cover.

The report provides summaries of 21 decisions made in complaints over private health insurance between 2018 and 2022.

They include a woman who received just short of €70,000 over an insurer’s decision to decline cover for treatment in another EU state. The ombudsman found the insurer’s assertion that its medical advice group had considered “all available literature” before determining the proposed treatment was “not consistent with a proven form of treatment for her condition” was “manifestly incorrect”, and also criticised a 3½ month delay in letting her know the decision.

However, other cases were rejected on the grounds that a person had upgraded their policy to cover their condition only after taking initial diagnostic tests and, separately, that tests showed a condition pre-existed the taking out of a policy at all and was thus limited by a five-year waiting period.

Among the issues highlighted in complaints to the ombudsman’s office was a lack of awareness among consumers that medical investigations, X-rays or blood tests undergone before private health cover was taken out could result in a condition being defined as being pre-existing.

“The policyholder may not believe that there was a pre-existing condition, because it had not been given a name at the time of the investigations. It is important for consumers to be aware that a pre-existing condition can exist, without a formal diagnosis, and it is the signs and symptoms within the period, which are relevant,” Ms McGovern said.

She acknowledged that issues surrounding health insurance were often “fraught with additional worry and stress, very often during a period when the people involved can be feeling very unwell”.

“Health insurance policies will not cover you for every eventuality, so it is worth taking some time now, to familiarise yourself with your cover and its associated waiting periods before you need it,” the ombudsman advised. “It is important that customers do not wait until they have symptoms to take out private health insurance and then expect to be covered for those illnesses.”