Price Increases are back
The last few years have seen health insurance pricing remain relatively stable with very few prices increases, insurers also gave partial premium rebates to their customers on several occasions. During the pandemic, claims fell dramatically as hospitals cancelled procedures to deal with the crisis while the state also took control of private hospitals to increase capacity for the public system.
Already in 2023, we have seen each of three health insurers announce price increases. Irish Life Health were first implementing a 4.5% average increase to their plans from 01 January, this was followed by Vhi at 4.8% and Laya at 4.4% in March and April respectively. In May, Irish Life announced another average increase of 5% to apply in July. It is expected that both Vhi and Laya will follow suit later in the year. These increase amounts are average increases to their plans so depending on what plan you are on; your actual increase may be higher or lower than this. For the first time in many years, some plans could be looking at double digit increases in price.
One of the main reasons we are seeing price increases is the general return to normality with claims from both private and public hospitals returning to pre-Covid levels.
However, there are a number of additional factors which are adding increasing pressure to healthcare costs and are likely to result in more price increases in the future. These are mainly due to the fact that private hospitals are facing increased costs due to a combination of higher wage demands, energy, and healthcare costs. These private hospitals are in turn seeking higher payments from the health insurers. In their press release issued in May, Irish Life Health said that they increased prices for a second time due to a "very significant" increase in the volume and size of claims. This claims experience is not unique to Irish Life, Laya and Vhi will also be feeling this pressure on claims and additional price increases will be needed.
Also, after a decrease in 2022, Minister for Health Stephen Donnelly has announced that the Health Insurance levy will be increased by €32 to €438 on a typical health insurance policy.
While some of these factors are inflationary and could be viewed as temporary, the overall trend for the future is that health insurance prices will rise. As a population, we are getting older, and this is putting increased pressure and demand on our healthcare system.
It is commonly advised that customers review their health insurance plan frequently, at least every 3 years. This is good advice, but it doesn’t quite focus people’s attention on one of the most important aspects of your decision, how old is your plan? Even with modest increases, over the long term these add up with the result that your plan may be significantly more expensive that a newer plan on the market. Older plans often have inferior benefits or at the very least don’t have modernised benefits suitable for today’s workforce. So, while it is good advice to review your plan frequently, it is just as important that you don’t just switch from one older plan to another.
“So, while it is good advice to review your plan frequently, it is just as important that you don’t just switch from one older plan to another”
David Glennon | European Mid-Market Solutions Leader
While Irish people have become better at reviewing and switching plans more frequently, unfortunately it appears that they are not choosing newer plans. Every quarter the Health Insurance Authority (HIA) publish a report that includes the 5 most frequently purchased plans by customers from each of the three providers in the market, Irish Life, Laya and Vhi. The last published report was to the end of September 2022, and this showed that the age of these 15 plans varied from 3 to 14 years old with the average age of the plans at just over 8 years old.
Typically, the three insurers, introduce about 30 new plans every year so there is lots to choose from. When selecting a plan that is suitable for your needs, also try to ensure that it is no more than 3 to 4 years old.
Despite these recent increases, customers can now get more for their insurance premium than ever before. In times past, health insurance plans were primarily about hospital care and particularly access to private hospitals. Health insurance plans have evolved to provide a much wider range of cover and benefits that can meet the needs of different people. Providers have also launched more healthcare services including clinics, digital doctors, and wellbeing services to help address the issues of access to primary care, a growing problem in Ireland. Along with cost, this is another important reason to check that your plan is up to date..
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