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Navigating the challenges of choosing a health insurance plan

By David Glennon | June 1, 2022

Navigating the challenges of choosing a health insurance plan. WTW Advantage Health is an innovative healthcare solution that is unique to the Irish market.
Health and Benefits|Future of Work

A 2021 survey conducted on behalf of the Health Insurance Authority (HIA) stated that 61% of consumers have never switched health insurance providers. Of those who have ever switched, 56% have only done so once.

One of the main reasons cited for not switching is that people find it too difficult to compare plans. This is hardly surprising when you consider there are over 320 plans on the market from just three providers. To make life even more difficult, the providers announced price changes and or benefit changes 27 times between them in 2021.

To make life easier for customers, the HIA has called on providers to reduce the number of plans on the market, however in 2021 the providers introduced 32 new plans and retired just 25 plans.

Many customers approach this selection challenge by looking at price on the assumption that the price of a plan directly relates to the benefits offered i.e., the more expensive the plan the richer the benefits are. While this is true at the more extreme end of the pricing scale, it is frequently quite a different story in that middle category where most plans are priced.

It is also from this category that corporate customers choose plans and like individual customers they face similar challenges in choosing an appropriate plan for employees and a similar reluctance to change. To illustrate this point we looked at two plans in the market from two different providers that are frequently used by corporate clients.

The first plan from provider A cost €350 more per adult per annum than the plan from Provider B. When we compared over 120 different benefits on the two plans, we found that the cheaper plan was equal to or better on 94% of the benefits. In other words, the cheaper plan is undisputedly a far superior plan.

If a company was paying health insurance for 50 employees with Provider A, they would reduce their costs by €17,500 per annum by switching to the plan with Provider B. If the company are subsiding dependents, their annual savings would be even higher. An employee on the higher tax rate would save €170 per annum on benefit-in-kind. If the employee is paying for a partner and two kids on the plan, their total annual saving would be almost €700. And when we look at the benefit differences, employees and their families will enjoy significant benefit enhancements right across the board.

One of the primary factors that determine these significant price and benefit differences is the age of the plan or when it was launched to the market. The plan from Provider A above has been on the market over 10 years. At the time this was a competitively priced plan with benefits appropriate to what the market was offering customers. Through years of mostly price increases, the cost of this plan has become uncompetitive and the benefits on the plan are also no longer comparable with what is on offer on other plans.

The plan from Provider B was launched just 3 years ago which largely explains its more competitive pricing and benefits. In addition to better pricing and benefits, newer plans tend to have benefits that better reflect a more modern and diverse workforce. Examples of this would be stronger fertility, mental health, and transgender benefits. Features that may not even exist on older plans.

You don’t always have to switch provider to achieve similar results, if you haven’t properly reviewed your plan in the last 3 years, there is a good chance that there is a better plan available to you. Health insurers will rarely proactively approach their existing clients to offer to switch them to their newer, better value plans so it is important for employers to have processes in place to avoid overpaying for outdated plans.

WTW Advantage Health is an innovative healthcare solution that is unique to the Irish market. Advantage Health actively manages your health insurance plan to ensure you are always in the most competitive plan with optimum benefits for your employees and their families. Find out how Advantage Health can reduce your costs and improve your benefits by availing of our complimentary review of your healthcare plan. Contact us to find out more.


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