While the cost of energy, fuel and at least some staples found in our supermarkets have gone up and down and then up again in the post-pandemic period like some class of joyless rollercoaster, the price of health insurance has only gone in one direction – up.
Multiple hikes from all the leading providers over recent years has left more than two million people worse off by many hundreds of euro annually.
And the depressing reality is there is worse to come.
From the beginning of next month, Laya Healthcare is increasing its prices by an average of 6.6 per cent while Irish Life Health increased its rates from January 1st by an average of 3.7 per cent and the VHI recently announced another increase averaging 3 per cent.
But bad and all as these price increases are, the averages only paint part of the picture.
According to health insurance expert Dermot Goode of totalhealthcover.ie, the latest raft of hikes has seen some plans increase by more than twice the stated average.
That means many families and individuals are facing hefty increases before their renewal date dawns. And Goode warns that he is “expecting more of the same” in the months ahead.
The companies all sing off the same hymn sheet, blaming the spike in prices on higher claim costs and more advanced treatments. Laya, for instance, has said its overall claim costs have risen by 29 per cent over the past two years, with increase driven by a rise in cardiology, orthopaedic, ophthalmic and cancer claims, all of which are up by an average 20 per cent.
Meanwhile, drug costs in private and hi-techs have increased by 31 per cent, the company said.
For its part, the Health Insurance Authority (HIA) has noted that across the sector, prices increased by 11 per cent on average in the first three quarters of 2024.
“These ongoing price increases can be attributed to a continued rise in healthcare costs as well as a sharp increase in demand for healthcare,” a spokeswoman has said. “We encourage all consumers to review their plan each year before they renew and to consider shopping around and switching.”
Shopping around and switching is often easier said than done. Last September the HIA warned that that market had grown too complicated and was overwhelming consumers and working against their best interests. The complexity – with more than 340 plans on the market – means many are paying over the odds for cover.
The HIA said legislative changes may be needed to simplify the market, and while it said it was committed to taking whatever steps are needed to ensure consumers get the best value for money in the future, there are no signs of any consumer-friendly and focused changes on the horizon.
Irish people are cumulatively wasting tens of millions of euro every year by not shopping around for health insurance. The total overspend might be as much as €150 million every year and there are hundreds of thousands of people paying hundreds – if not thousands – of euro more than they need to for health cover because they do not make a few calls and ask the right questions.
That is not to put the blame on consumers. It is, as the HIA notes, a complicated world and the fear of making a mistake is entirely understandable. But for those looking to save money, the first two questions they might ask are: Is my current plan offering me value for money and could I get a comparable level of cover for less?
[ Conor Pope’s guide to health insurance: Everything you need to knowOpens in new window ]
That takes us to a reader called Suzanne who contacted us on behalf of her mother, who is in her 80s and is recently widowed.
“She had private health insurance with Laya Healthcare under a plan called Essential Connect Family which is coming in at a renewal price of €2,200,” Suzanne says.
“I know that all health plans have gone up but given that my mam and dad have had a healthcare plan most of their life it’s very hard to not have one. My Mam’s sole income is a contributory State pension. She has a medical card, and free GP visits.”
The first – perhaps unspoken – question that Suzanne is asking is if she could should stick with an insurance policy given the financial constraints her mother is under. It is a fair question. If a person has a heart attack or stroke or has to be rushed into an emergency department suffering from any other serious ailment then health insurance makes little difference – at least in the short term – and given that her mother has a medical card and does not have to pay for GP visits, many other treatments she may require will come free.
According to Goode, however, cancelling her policy should be very much the last resort.
He points out that people with health insurance get faster access to consultants – even consultants working out of public hospitals. They get private and semi-private rooms in public hospitals if available and can access private hospital and private emergency departments and clinics.
They also have access to a much broader range of outpatient services and, as anyone who has had to navigate the maze of Ireland’s public health system will tell you, people can be left waiting months – and sometimes years – before seeing consultants.
His advice to people is that if health insurance becomes unaffordable they should first look at reducing the cover they have “but definitely keep some semblance of it in place. If Suzanne’s mother drops it and goes to rejoin at a later date, all pre-existing conditions won’t be covered for five years. She would also have to deal with age loading so I’d be definitely advising them to taper the cover to suit their budget or whatever her requirements are but I would definitely be advising against cancelling.”
He says that the only time he would “ever recommend an older person to consider cancelling – if affordability is an issue – is if they are in a nursing home and there is not much likelihood they will ever go into hospital for any major surgery. That is when families will consider reducing the cover maybe down to the bare minimum.”
He says he has noted a trend which has seen younger people taking more of a role in looking after their older parents’ plans.
“They’re actively doing their reviews on behalf of their parents. They see mom and dad paying really high premiums and they know they’re terrified of making any changes to their cover and they probably have underlying conditions.
“Older members are easily spooked so if there’s any hint of a reduction or a change they’ll just go no and keep paying what they think they have to keep paying. So family members are doing their reviews and reassuring them and telling their parents there’s no problem taking on an excess if you don’t use that hospital or if you don’t care about a private room.”
[ The health insurance maze that’s costing millions of people thousandsOpens in new window ]
According to Goode, many people who are on older plans are paying up to €3,500 “simply because they’re afraid to change and they keep auto-renewing”.
“A lot of older people are facing 25 per cent increases but they also have benefits being reduced,” Goode says.
He notes that 50 per cent of those who start making even basic inquiries will get a better deal from the same insurance company. “There’s usually other plans there that they can consider with the same company.”
When he is looking at savings people can make, he looks first at where people are living and what hospitals they are using and what underlying conditions they might have as well as their budget. “I can talk about all these fantastic plans but how much can they ultimately afford and have they any treatment pending for the coming year?”
He notes that Suzanne’s mother is on a very dated plan and could save a lot of money if she switched to a plan that only covered 80 per cent of certain treatments including orthopaedic surgery and cataract removal.
“If she is not too preoccupied by those procedures she should be checking out a plan with Laya that’s called Inspire Plus,” he says. “From April 1st it’s €1,786 and today it is €1,633, while the plan she is on will climb to €2,330.”
That is one option and it is “still one of the best semi-private corporate plans out there”.
She could also save about €350 with Optimum Premium, Goode says. “What I like about that plan is that it’s a private-room corporate plan, so she’s going to be covered for a private room in every public and private hospital and is also going to get 75 per cent back on all consultant fees and physiotherapy. So it’s actually quite a significant upgrade in cover compared to what she has and it’s still lower cost but she needs to be comfortable with that change for those 13 procedures that will no longer be fully covered.”
Dos and don’ts of buying health insurance
- Do ask yourself how long you have had the same policy. If you have had the same one for more than three years there is a very good chance you are paying over the odds for cover.
- Don’t switch mid-contract. You can only change providers when your annual contract with your existing provider ends.
- Do start doing your homework a few weeks before renewal so you are not putting yourself under undue pressure to make a decision with a deadline looming.
- Do not simply ring an insurer and ask the person on the other end of the line what they think you should do.
- Do ask if the company has a lower-cost equivalent plan to the one you are on and make it clear you are happy to take on some minor reductions, depending on the savings.
- Do start with your existing insurer. They will have a complete record of all previous claims so tell them everything that’s important to you and detail all your underlying conditions and the procedures you’ve had done, and get them to confirm that any new and cheaper plan covers everything you have had covered in the past.
- Do not let them push you online. Speak to people rather than making modifications online. If you buy online then you are entirely responsible for the decisions you make whether they’re good or bad. But if you are talking to representatives of a company and ask them questions and get them to explain everything again and again until you are comfortable you understand, then they have a duty of care to you that is not so tangible in the online space.
- Do be honest. Tell them all the relevant details of your health because they can’t refuse you based on any of your answers. They can’t load your policy with additional charges. They can’t change the terms because you’ve disclosed something. And the more specific you are with your questioning, then the more specific their answers have to be – and everything is recorded.
- Do not have the adults and children on the same plans. Children do not need the same level of cover as adults do.
- Do talk to an expert or, at the very least, talk to the insurers and to make sure you understand the decisions you have to make.
- Do not worry about being penalised for your age or your health. There are strict rules in place that give consumers protection irrespective of their age or their health issues. A person who has a long-standing policy with company A will have served the waiting periods expected of them so can switch to company B and get all the existing cover they had with company A immediately.
- Do not let it lapse. Anyone buying health insurance for the first time or after a break in cover of more than 13 weeks will have to serve waiting periods before having full access to all of their benefits. The waiting period for inpatient care for pre-existing conditions can be a maximum of five years.
