As many as one million people with private health insurance are facing price rises amounting to hundreds of euro between the start of October and early in the new year.
Many customers of Laya Healthcare who are due to renew their health insurance from October 1st will see the cost of their polices climb by more than 10 per cent as two separate increases announced in recent months kick in. Irish Life customers who have renewed since earlier this summer have already had two increases applied to their policies.
Less than two weeks ago Laya, the second largest health insurer in the State with close to 700,000 members, announced plans to increase the cost of its policies by what it said was an average of 3 per cent from the beginning of October.
Cost of policies
It blamed the soaring volume and cost of claims as well as higher energy and staffing costs. Laya also said the price hike would add an average of €42 to the annual cost of policies.
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It added that although the average price increase was 3 per cent, the cost of some policies would climb by 5 per cent. However, for many of its members, the price increases looming will be even worse than that.
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One customer who contacted The Irish Times said the cost of a policy covering two adults and a child was climbing from €2,550 to €2,950, an increase of just over 15 per cent.
A spokeswoman for Laya said the scale of the increase was as a result of the price hike that will be applied to the policy from October and the increase it announced in April of this year.
“We have tried to minimise the impact of premium increases on our members. However, we need to ensure that we’re serving the current and future healthcare needs of our members, striking a balance of keeping premiums affordable while meeting the growing needs of our 690,000 members and giving them rapid access to more hospitals, consultants and urgent care services when they need it,” she said.
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Caught off guard
Health insurance expert Dermott Goode of totalhealthcover.ie warned that the scale of the price increases in the months ahead will catch many people off guard.
“There is a big shock coming to a lot of consumers from October,” he said. Mr Goode added that companies use averages when outlining price increases, a practice that could give some people a false sense of comfort. He noted Laya had announced an average increase of less than 5 per cent in April and then a further 3 per cent was announced earlier this month to take effect in October.
“However some plans in April went up by between 8 per cent and 10 per cent,” said Mr Goode. “The cumulative effect of the two price increases means that thousands of consumers could be facing [an] increase of anything from 10 to 15 per cent. It is the same with Irish Life and we are seeing cumulative increase of 13 and 14 per cent.”
Move on prices
Mr Goode warned that VHI, the largest provider of private health insurance in the State with more than 1.1 million subscribers, was likely to move on prices soon.
“I am expecting them to announce something similar to Laya soon so its customers will not be immune either,” he said.
VHI did not respond to queries from The Irish Times about the matter.
What this means, based on the spread of renewal dates for policyholders across the industry, said Mr Goode, is that “the one million people who are going to renew before the end of February need to brace themselves for double-digit price increases depending on the plan that they have”.
