With unfortunate timing, Level Health opted to announce an increase in premiums for its private health insurance customers last Friday just as everyone was trying to close the door on bad news at the end of the week before Christmas.
It says prices will, on average, rise by 4 per cent for its customers from January 1st.
The news just served to remind consumers here that it has been another grim year in terms of medical inflation, and made the newest arrival on Ireland’s private health insurance scene the Grinch this Christmas.
In fairness, the increase is the first announced by Level Health this year and is noticeably below those published announced by its peers.
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VHI has announced cumulative increases of just over 6 per cent in two tranches during the year. Irish Life Health customers face increases of 8 per cent on their next renewal while those at Laya have seen the average cost of their policies rise by 11.4 per cent.
Data from the Health Insurance Authority says the average annual adult premium was just over 11 per cent higher in the third quarter of this year compared with the same time a year ago at a time when general inflation is running at 3.2 per cent
On that basis, it seems 2025 could replicate the 12.2 per cent increase across the whole of 2024, where some policies jumped by as much as 25.6 per cent.
And worse could come as Level Health has also become the latest arrival in the private health market to challenge risk equalisation – the protocol that determines everyone on the same policy pays the same prices regardless of age or illness – in a formal complaint to the European Commission.
Every new player to the market has challenged risk equalisation at one time or another. So far, all have failed.
If Level Health succeeds, despite its protestations that it supports the broad principle of risk equalisation, in a world where demographics dictate that Ireland’s population is ageing dramatically, we will move towards a market where people will find appropriate insurance unaffordable just as they most need it.
That would put us on the road to US and UK-style private health markets.
Level Health says the current system is uncompetitive. Just a year in the market, it seems a little early to determine that. And the business is led by Jim Dowdall, an industry veteran who would hardly have come back to the well again unless he thought there was a profitable business to be built.
For now, it is just timing that makes Level Health a Grinch. Undermining risk equalisation could see it cast more permanently in that role.
