VHI, the State-owned health insurance company, has announced its second price increase this year, which will see the cost of premiums rise by a further 3.5 per cent on average across its portfolio of health insurance plans.
The increases, which will be introduced when customers renew their policy after October 1st, are a response to what the insurer called a “sustained increase in both the volume and costs of healthcare claims”. It will mean some VHI customers will have seen their premiums jump by between 10 per cent and 15 per cent in 2024 alone after the insurer increased premiums in March.
In a statement, VHI said it has seen a 14 per cent increase in private hospital claims since the start of 2024 compared with last year.
Ireland’s largest health insurance provider pushed ahead with average price increases of 7 per cent in March in a move that surprised industry observers. It followed shortly after a series of price hikes in 2023, the most recent of which came just three months before the March increase was announced in January 2024.
However, VHI said it has tried to “somewhat mitigate” this week’s price increase by reducing the cost of children’s premiums on selected plans by 25 per cent. The insurer said it will also add day to day benefits to some plans.
Commenting on the latest price hike, VHI managing director Aaron Keogh said the insurer took the decision to increase prices because premium income has not kept pace with healthcare demand and associated claims costs.
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“We have to price prudently for the future so that we remain in a position to meet the healthcare needs of our members,” he said. “We understand the affordability challenges that many people are facing and the importance that is placed on retaining health insurance and we are determined to continue to deliver value for money.”
Published in April, the State-owned company’s 2023 results showed it had sunk to a €43.4 million loss, compared with a net surplus or profit of €34.3 million in 2022 amid an 18 per cent jump in the cost of claims and higher labour and energy costs.
Mr Keogh said 2023 and 2024 have seen “accelerated growth in healthcare claims volumes and as a result unprecedented increases in healthcare claims costs”, because its members “are accessing more healthcare than ever before in a variety of settings”.
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Dermot Goode, head of Lockton Insurance Brokers’ healthcare division, said the hikes could add as much as €50 to the cost of some VHI plans such as its “one plus one” scheme.
However, he said it is important to recognise that not all plans will be affected in the same way. For example, VHI’s Enhanced Care schemes will be increasing by approximately €5 per adult, which is less than 1 per cent.
“Consumers need to be wary of these average figures,” Mr Goode said. “The average being quoted by VHI is 3.5 per cent but some of their older plans such as Advanced Care Extra Day-to-Day and Premium Care will increase by approximately 5 per cent.
“Consumers also need to note that this is their second increase this year which means that the cumulative impact for those renewing on or after the 1st of October could be 10 per cent to 15 per cent depending on the plan held.”
Mr Goode said further increases this year cannot be ruled out and as we enter the peak renewal period between October and February, there is a “real risk” that some customers will be “priced out” of the market.
In a statement on Wednesday, the Health Insurance Authority said the total level of claims paid by insurers in 2023 rose by 15 per cent on the previous year, according to its monitoring of the market, “and there was a slight increase in claims for private hospitals”.
The industry regulator said the health insurance market is Ireland is “an open market,” and insurance providers can make price changes as they see fit.
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