WHAT'S THE STORY WITH HEALTH INSURANCE?

At the formal launch of Hibernian Health last Monday, a reporter asked what the waiting period was for someone who switched from one of the other health insurance providers in the market. There was a pause from the podium before it was pointed out that there was no wiating period and that people were free to move from one insurer to another without incurring any penalty, or even a momentary gap in their cover.

Although the reporter should have known better, the person was not alone in being a little confused about how health insurance in this country works. According to a recent survey carried out by the Health Insurance Authority (HIA), the regulatory body governing the sector, 25 per cent of people are unsure about their switching rights, while another 15 per cent labour under the misapprehension that they cannot move without losing some degree of cover.

It is difficult to see where the confusion arises, as the rules are pretty straightforward. When you first take out a health insurance policy, the company will, generally speaking, make you wait several months before considering any claim. This is to stop people who discover they're ill taking out a policy and immediately having themselves admitted to the Blackrock Clinic for a bypass, at the insurer's expense.

Waiting periods do not, however, apply to anyone who already has health insurance who is moving from one company to another, although if you are upping your cover and moving from VHI's Plan B to Quinn Healthcare's Health Manager Gold, then you will have to wait a predetermined period before taking advantage of the extra benefits.

Getting the simple message across is difficult, accepts HIA chief executive Liam Sloyan. "It is extremely easy to switch, but I am not sure enough people appreciate that," he says. "It actually only takes two phone calls - one to your new insurer and one to your old one."

Earlier this year, Hibernian Insurance bought a majority stake in Vivas and last Monday began the process of rebranding it as Hibernian Health. It says it will act as a "catalyst for major change in the health insurance market in Ireland". And it will have to if it is to have any hope of achieving its stated aim of reaching 500,000 subscribers within five years.

Despite its comparatively high prices the VHI remains the main player in the sector, with 70 per cent of the market of 1.5 million, according to the latest HIA study. Quinn Healthcare has a 20 per cent share, up from 17 per cent in 2005, while Hibernian Health now has a 7 per cent share, up from 1 per cent in 2005.

ALTHOUGH THERE AREclear savings to be made by switching from one insurer to another, the HIA survey shows that just 15,000 people, or 1 per cent of the 1.5 million with health insurance policies, change companies each year.

Deirdre Ashe of Hibernian Health is optimistic that "there is an increased appetite to switch". According to Hibernian research published at last week's launch, more than two-thirds of people with health insurance will move in search of better value, with most saying they'd do so in order to save €500 or less for a family membership.

One main price comparison it gave last week focused on a family of two adults and two children. It said its We Plan Level 2 costs €1,541, while VHI Plan B Options costs €1,969.78, leading to a saving with Hibernian Health of €428.78. Unsurprisingly, the VHI immediately responded saying that the comparison was not valid, while Quinn Healthcare also questioned the comparisons.

The VHI makes much of the fact that because of its long-standing position in the market, it has earned the trust of more Irish people and there is certainly a significant element of truth to that. It is also important to point out that for many people, price is not the main driver when it comes to choosing health insurance, with many prepared to pay more for ostensibly similar policies because it gives them greater peace of mind. HIA figures also show that some 50 per cent of those with policies have not considered switching because they are happy with their provider.

IT IS EASYfor Hibernian's rivals to question the comparison, because it is very difficult to make like-for-like comparisons on the various options each insurer offers. Even the professionals struggle on occasion, with Sloyan accepting that policies are "complicated" and like-for-like price comparisons are "difficult to simplify", but he says that as the vast majority of claims involves hospital in-patient care, "that is a good place for consumers to start".

Ashe describes the negative response as "predictable" and says both of Hibernian Health's competitors have recently launched new products with top line prices which look appealing, but that see benefits "being stripped out". She said consumers needed to understand what access they have to hospitals, and what excesses apply to their policies. She said some rival plans had per night or per hospital visit excesses of up to €200, while Hibernian Health "don't have any excesses in terms of in-patient care".

Ashe also says that like Quinn Healthcare, Hibernian will soon launch bundled products, offering its 1.2 million motor and home insurance policy holders discounts if they take out health policies, but she declined to say when these new offers would be rolled out, other than to say they could be expected "over the next number of months".

Discounts, if they materialise, won't come a moment too soon for many consumers. Last week, health portal www.irishhealth.com asked its readers whether they thought competition over the past 10 years had made any difference to the health insurance sector.

Only 24 per cent of respondents believed that competition had brought about better choice and value, while 66 per cent said it had made no difference. One post said "they all basically sell the same thing with a different 'spin' but family policies all work out similar with them all".

This is just the sort of sentiment Hibernian is very anxious to counter; whether it will have any joy with this very much remains to be seen.

SEEKING A GOOD QUOTE FROM THE MAIN PLAYERS

For a person in their 20s with no dependants looking for a fairly low level of cover: Quinn suggested Essential Plus, which offers private rooms in public hospitals and semi-private rooms in certain private hospitals. The quote we were given was €539 per year, although there are excesses of €125 for each stay in a private hospital, and people who pay monthly by direct debit are also hit with a 3 per cent surcharge. When we called the VHI, it suggested we take out a Plan B with an excess. The level of hospital cover is broadly similar and the price we were quoted was €592.66. The policy has an excess of €75 per private hospital stay.

For its part, Hibernian Health is quoting a price of €556 with no excesses or surcharges.

For a couple in their 30s with two young children, a broader policy covering out-patient and GP visits is probably more suitable: Quinn's Familycare offers private rooms in public hospitals and semi-private rooms in private hospitals. It also gives a range of out-patient cover and 50 per cent back on GP visits. The price we were quoted was €1,673.90. When we called the VHI we were told its equivalent, Plan B, has a price tag of €1,813. Hibernian Health is significantly cheaper at €1,541 and offers access to more hospitals than the other two policies.

For a person in their 50s who wants a considerably higher level of cover:we opt for Quinn Healthcare's HealthManager Silver which offers private rooms in private hospitals and semi-private rooms in the hi-tech hospitals. We are quoted €1,340 per year. The equivalent VHI offering is Plan D which costs €1383.21. Hibernian Health's IWe Level Four plan gives the same level of cover when it comes to in-patient care and it costs €1,324.

For details see www.hia.ie