Consumers choosing a private health insurance product may be in need of calming therapy by the time they have waded through the options available. There are only two providers in the market at present, VHI and BUPA Ireland, but between them they offer a choice of 14 plans.
VHI offers plans from the basic A to the Rolls-Royce E, with each plan on offer as the basic plan or in an "option" version. The option plans cost more and provide increased benefits in areas such as cardiac, maternity and outpatient cover, as well as increased cover when travelling abroad. Student rates are only on offer to those taking the option plans.
BUPA has four plans, ranging from Essential to Gold. Three of these can be compared to VHI's offerings (see panel). Student rates are available with all BUPA plans.
With the old "comparisons are odious" maxim in mind, the literature provided by the two companies does not lend itself to making an easy choice between them.
VHI is the largest provider with some 1.5 million members. Of these, 498,000 have chosen Option plans. VHI attracted 80,00 new members in the year ending February 2001. The most popular plans are Plan B and Plan B Option, which account for 72 per cent of the membership. Eighty per cent of all members are in group schemes, which provide savings of 10 per cent.
BUPA Ireland, which entered the market in 1997, has 190,000 members. It was the first company to offer cover for alternative therapies and sells itself as a champion of preventive health screening. The most popular plan is Essential Plus and the majority of members are in group schemes.
Mr Brendan Quinn, regional manager of VHI East, said more than 98 per cent of payouts were made for hospital stays, with the remainder going on outpatients. "The plans are not designed to provide outpatient cover. They are designed for in-patient cover with catastrophe cover for outpatients with a lot of expenses," he said. BUPA's payout on outpatient expenses would be in the same order of magnitude.
The most popular plans, VHI's Plan B and Plan B Option and BUPA's Essential Plus, offer roughly the same range of in-patient benefits. All three plans cover semi-private accommodation in private hospitals (excluding the Blackrock Clinic and the Mater Private) and private accommodation in public hospitals. Both providers have agreements regarding fees with 98 per cent of consultants.
VHI covers 102 hospitals as opposed to BUPA's 90. VHI's psychiatric provision in both Plan B and Plan B Option is better than BUPA's at 180 days per annum versus 100 days.
However, when it comes to outpatient provision, BUPA covers a more extensive range of options, including cover for speech therapy, cancer screening and chiropody. VHI provides for six visits to an alternative practitioner (acupuncture, chiropractor or osteopath) under Plan B Option and four visits under Plan B. BUPA includes homeopathy and does not set a limit on the number of visits.
Both companies have hefty excesses (£250 per individual for Plan B, £175 for Plan B Option and £200 for Essential Plus). This means consumers must pay this amount out of their pockets before they can begin to claim benefits, and probably accounts for the fact that only 2 per cent of VHI's payouts are for outpatient expenses.
So, choosing a plan may come down to individual preference. Price may also be a factor (see panel). For families with children or students then BUPA's Essential Plus offers savings over VHI's Plan B (no student rate) and VHI's Plan B Option, where students' subscription is £153.33 compared to £117.15 with BUPA.
The Consumers Association of Ireland chief executive, Mr Dermott Jewell, said: "You're looking at a situation with only two providers. It must be borne in mind that inevitably increases will keep coming at us." With the increased interest in alternative therapies, Mr Jewell suggested consumers don't just look at the current option.
From April, it will appear that healthcare insurance has got 20 per cent cheaper. This is because the tax relief that normally had to be claimed by the healthcare subscriber will now be dealt with at source.
The market is about to change somewhat with the Health Insurance Bill going to committee stage today. A Health Insurance Authority is in the offing. It is expected that community rating, which obliges everyone to pay the same for health insurance, regardless of age, is to be abolished in respect of outpatient cover.
VHI has developed a primary care plan which it will sell separately, once the legislation is passed, and will be priced according to the plan a member already holds. This will cover outpatients, GPs, and alternative therapies with no excess.
BUPA Ireland's Health Manager plan is currently alone in the market, offering enhanced outpatient/GP/alternative practitioners/consultant benefits, with no excess, as well in-patient cover. Essentially, the plan provides for a 50 per cent payback on outpatient bills up to £500 with 75 per cent payback over this sum.
There is also talk of a third health insurance provider entering the market. Mr Quinn said the advent of a third provider would make for real competition. At present, both BUPA and VHI offered broad-ranging products but more niche products will probably come on line.
Why choose VHI over BUPA? Mr Quinn said: "The difference is choice. Most people start with Plan B but there is the flexibility to change to a range of options. People can pick a plan to suit their needs at any life stage."
Why choose BUPA over VHI? Marketing director Mr Sean Murray said: "We have a wider range of fees covering a range of alternative therapies, cancer screening and language therapy."