Every rise in the cost of health insurance means more people abandon their private policy cover, and rely on the public health service to meet their treatment needs. The VHI’s announcement of a 3 per cent average price increase on premiums, followed by even larger increases by Laya (20 per cent on average) and GloHealth, will accelerate that process. It will add further pressure to a public health system that is struggling to cope, as demand rises for its increasingly overstretched services. In the past four years the cost of some health insurance plans has gone up by more than two thirds. And since 2008, the number with private health insurance has fallen steadily – from 51 per cent of the population to under 45 per cent. That number will decline further, as health insurance costs continue to rise.
VHI’s latest increases are to cover the higher charge for private patients occupying beds in public hospitals. VHI says the full impact of this major change, which came into effect on January 1st, remains uncertain. Nevertheless, this year the Government expects to raise €30 million in revenue from the charge. And that, most likely, means further price increases under this heading, both from VHI and the other health insurance providers, later in the year.
Holders of private health insurance have been particularly hard hit in recent months. In the budget, the tax relief on health insurance payments was further reduced, while the charge for private patients occupying public hospital beds was raised to bring the price closer to its economic cost.
Whatever the Government's intention, the net effect has been to make private health insurance a much less affordable option, as the declining numbers of policyholders clearly indicate. Minister of Health, James Reilly, has acknowledged private health insurance costs are "simply unsustainable" at present. Equally, the Government's two recent budget decisions have only served to magnify the difficulties of the sector – something the Minister, it would seem, has been reluctant to recognise.