Laura Slattery investigates where consumers can save on health insurance
Failing to check up on your health insurance options may damage your bank balance. Like most health warnings, such a suggestion is likely to be shrugged off by hundreds of thousands of consumers.
Understandably, most people prioritise health over wealth, which might explain why many continue to pay extra to State-owned health insurer VHI for what they believe is a higher or simply more familiar standard of cover than that available from its main rival, BUPA.
According to a survey commissioned by the Health Insurance Authority (HIA), only 6 per cent of people with private health insurance have ever switched provider. Among those who have switched, the majority made the move from VHI to BUPA, with almost half citing cost savings as the main reason.
BUPA's premiums are due to increase by 8.25 per cent for all renewals from March 1st, following an 8.5 per cent jump in VHI prices last September.
Now that the roundabout of price increases has taken another turn, BUPA's flagship policy, Essential Plus, is just under €16 a year cheaper than VHI's most popular product, Plan B - not enough to spur significant numbers of VHI's 1.55 million members to overcome paperwork phobias and decamp to BUPA.
However, independent consultants say that BUPA's Essential Plus provides cover of a standard closer to VHI's Plan B Option, which is over €63 or 14 per cent more expensive for an adult. It is also 17 per cent more expensive than Essential Plus for a child and over 33 per cent dearer for a student aged 18-21 in full-time education.
A family of two adults and two children will pay €182.46 a year more for health insurance under Plan B Option than they will under Essential Plus. So why aren't more people opting for the cheaper alternative?
"Inertia is a human trait, let's face it," says Mr Dermot Ryan, chief executive of the HIA.
People often simply inherit their choice of health insurer from parents or employers, he adds. "Maybe they should look at it a bit more."
The HIA has published a report comparing the main benefits on offer under VHI and BUPA plans. The report, which will be updated to reflect BUPA's premium increases next month, "strips out the bells and whistles", according to Mr Ryan.
Available on www.hia.ie, it aims to give consumers a transparent overview of hospital accommodation and treatment benefits, as well as maternity, overseas and outpatient cover, without actually advising which one is best.
VHI asserts that the insurance plans it offers are not comparable to those of BUPA. Therefore, it implies, the fact that BUPA's premiums are cheaper means nothing.
"The insurers can put all the spin on it they like and that's their right in a democracy," says Mr Ryan. "As a regulator and a State body, we're not going to say 'choose A over B or B over A'."
But the HIA is concerned about the low level of real competition in a market where only 30 per cent of people know the details of their existing plan.
But are consumers cutting corners on their insurance benefits and leaving themselves exposed to higher healthcare bills if they move to BUPA?
Mr John McGovern of employee benefits consultants Hewitt & Becketts says not. "In several areas, I do believe the BUPA product is marginally better value for money."
Under VHI Plan B and BUPA Essential Plus, both insurers give full cover for private or semi-private accommodation in a public hospital and cover for semi-private accommodation in private hospitals, other than the Mater Private Hospital or Blackrock Clinic. All plans provide full cover for day care and out-patient procedures in Mater Private and Blackrock Clinic.
The HIA asks consumers to remember that even though their policy may cover a particular level of accommodation, it may not always be available. Semi-private rooms can accommodate up to five people, it notes.
VHI has cover at 101 hospitals, compared with BUPA's 92.
Both VHI and BUPA have recently upgraded the maximum benefit available under their maternity cover. VHI now insures up to €1,250 for normal deliveries on plans A to E and €1,350 on Plan B Option, while BUPA covers up to €1,310 on Essential Plus.
In general, VHI also offers longer lasting cover for in-patient psychiatric treatment and higher maximum benefits for emergency overseas medical expenses.
It will also pay a nominal amount - €40 a day - for the travel and accommodation expenses of parents accompanying sick children, as long as their stay away from home lasts more than three nights. This is not covered by BUPA.
However, BUPA has a more extensive range of out-patient benefits. Its out-patient "excess" - the first part of any claim that the consumer must pay - is €220, the same as on VHI Plan B Option. However, Plan B customers must pay the first €310 of any claim.
One way around these high out-patient excesses is to buy a cash plan from companies such as the Hospital Saturday Fund and the Hospital Savings Association. These plans will refund 50 per cent of outpatient bills, without imposing an excess.
BUPA's Health Manager plans include a similar benefit as part of an overall health insurance policy, while VHI's Health Steps products can be purchased as add-ons to its main plans.
Around 50 per cent of people in Ireland have health cover and over 80 per cent of those are insured with VHI. High satisfaction rates with the way claims are handled is one reason why people say they will never switch.
Customer loyalty is another, according to Mr Aongus Loughlin, healthcare consultant at Mercer Human Resources Consulting. "People think that moving to a new insurer means they have to give up the benefit of being with the old insurer for all those years," he says.
But under a rule known as "open enrolment", insurers must accept anyone of any age or health status who wishes to transfer without imposing a waiting period on the length of time before they can make a claim. "They can't make you start again," says Mr Loughlin.