VHI’s more than 1.3 million subscribers received bad news today after the State’s largest private health insurer announced an average 9 per cent rise in premiums.
Older people will once again bear the brunt of the increases with the HealthPlus Extra policy, formerly known Plan B Options, set to climb 12.5 per cent.
This policy, which is popular amongst the older demographic (particularly those over 60 years-of-age) has increased 59 per cent during a series of price hikes in the last 14 months.
The company claimed today’s price increases were unavoidable and older customers continued to be “significantly loss making”.
It warned “until such time as a comprehensive risk equalisation scheme is introduced which makes it as attractive to insure an older, sicker person as a younger, healthier person” the health insurance market would continue to segment.
“The sole purpose of the price increase is to cover our customers’ healthcare costs in the coming year,” VHI chief executive Declan Moran said.
He said the company was losing money and the price increases were essential to ensure it remained sustainable.
Mr Moran said the company was "acutely aware" of the financial pressures facing people and added the company was not passing on the recently announced increase in the private health insurance levy.
The VHI said the average claims cost per customer had risen 15 per cent since 2009 and now stood at €980 per patient, compared with €851 three years ago.
Medical innovation was contributing to more positive health outcomes for sick people, particularly in cancer and cardiac care and survival rates for people with these conditions had increased significantly over the past 5 years, he added.
“These advances, while welcome by all, do have an impact on the cost of care and are a significant driver for increased private health insurance premiums each year,” the company said.
Mr Moran said the company the company had imposed cost savings of €190 million on its operation since 2009 and that administration costs accounted for less than 7 per cent of premium income.
