HEALTH INSURANCE

It’s that time of year again when health insurers warn there is no alternative to hiking premiums if standards of cover are to be maintained. VHI is first out of the blocks and their plaintiff cry is given lead-story status in the business section of The Sunday Times, with the state insurer calling on the government to increase the health insurance levy by almost 50% next year.

The move, if approved, would mean a family with three children could expect to pay €254 more on their premium. It would add €88 on all adult premiums and €26 on all child premiums.

VHI says it needs to increase levies to cover growing losses incurred on cover for older subscribers, which the company says is costing it €170m a year. In a submission to the Health Insurance Authority (HIA), VHI says a higher levy is the only way to ensure that older people are not penalised.

“VHI will receive a net €38m in 2010 from the current levy but will incur losses of €170m in meeting the healthcare needs of its customers,” it said. “The levy… in its current form fails to ensure that the cost of health insurance for older and sicker people should be effectively supported by younger and healthier people.”

However, in its submission to the HIA, Aviva accuses the VHI of being the author of its own misfortunes through loss-leading pricing, such as a recent offer of free insurance for children.

HIA figures show that 42,000 people gave up private insurance cover in the year to June – at least partially as a result of the scale of increases noted in another article in The Sunday Business Post, which says the cost of health insurance has risen by almost 170% over the past decade, outstripping the rise in the cost of hospital services by over 30%.

Extrapolating from Central Statistics Office figures, reporter Emma Kennedy calculates this increase means a family that paid €250 a year in 2000 could now expect to pay €420.