Tis the season to be jolly and all that, but it’s also the time of year when most people have the less than happy experience of receiving their health insurance renewal notice.
The Covid pandemic has made everyone a little more fearful of their health and hospitals, and although money is tight for many, even the ‘squeezed middle’ try to find the resources to cover private insurance. 2.3 million of us have it, an increase of 50,000 since last year.
Premiums are on the rise again, however, with Irish Life Health announcing 2.5pc on average since October, followed by Laya (2.9pc from 1 January 2021) while the VHI increased by 2pc on 1 March 2020. For all three, it won’t be the only increase in a year.
Depending on the plan held, the increase could be multiples of the headline figure, so be wary of reported ‘averages’.
Medical inflation is being blamed, which seems to grow exponentially, and there is a lot of catch-up in elective procedures which were suspended during the first lockdown, when all private hospitals were purloined by the State.
In some cases, the insurers are trying to price customers off certain plans, and a premium hike is the quickest way of doing it. Invariably, there is another, similar plan which is cheaper, so always ask.
What should you look for, and what questions should you ask if you’re one of the more than one million members renewing in the next three months?
Dermot Goode, of TotalHealthCover.ie says an interesting trend has emerged with the number of consumers wanting to upgrade their cover to private accommodation. “They are concerned about having to share in anything up to five beds in a ward. You need to be aware of the ‘upgrade rule’ though, which could mean that the increase in cover might not kick for a further 2 years for any existing medical conditions.”
There’s also been an increase in the use of online supports and web-based services like digital doctors, scan-and-send claims and mental health supports. It’s really good that all three insurers, and most plans, have options here so it’s worth checking yours to see what’s available for free or calling the provider directly; they’ll be very helpful. Here are some other suggestions:
Public Hospitals
It’s a myth that public hospital treatment is free. Unless you have a medical card, you must pay €80 per night (max of 10 nights, or €800 in any one year). This is fully covered on every policy.
You’ll often be asked if you have private health insurance when you find yourself in a public hospital (usually via A&E) and whether you want to switch to private treatment. Mr Goode says if you do, you’ll have to sign a form which enables the hospital to claim €813 per night from your insurer.
“Patients need to understand that by signing this form and opting for private treatment, you are not guaranteed to get a private room or a consultant of your choice. Many patients are now aware of this practice in the public hospitals and they are insisting on private rooms or treatment by a specific private consultant prior to signing any form,” he warns.
“It’s important to note that every citizen is entitled to access our public health system and at the maximum charge that can apply is the €80 per night (except with medical card)”.
Are You On the Wrong Plan?
How do you find out what’s right for you? Well, as a general rule, if you’ve renewed the same plan for three years or more, you’re probably over-paying by now.
If you haven’t compared your policy with available ‘corporate’ plans, do so. These are policies designed for mass markets (like teachers, nurses etc), and carry discounts or better options. They’re given confusing names (usually a weird series of numbers) to put you off, but persist and ask for them to be compared. You have a legal right to take out any policy on offer from any insurer.
Don’t pay an adult rate for anyone under 24 – all plans have young adult rates which are much cheaper.
What to Ask
When you get your renewal in, the worst thing you can do is simply continue it without question. It may be the right plan for you, but often it’s not. Here are the questions to put to the call centre:
1. Check out www.hia.ie, the regulator’s website to compare plans side-by-side.
2. Contact your existing insurer and ask them if they have a lower-cost equivalent to the plan you’re on now.
3. Ask the insurer to explain exactly what you’ll be losing/gaining by switching.
4. Call the other two insurers and ask them the same question.
5. If you don’t have the time to do all this, use a specialist broker instead; there’s no direct fee as they receive a commission from each insurer.
6. In any event, you have a 14-day ‘cooling off’ period after renewal. After this, you’re locked in for a year.
7. Don’t ‘skip’ the renewal. If you are out of cover for more than 13 weeks, you may have to pay a much higher premium when you reapply.
Shortcuts: Covering your costs
Tax Relief
THERE is tax relief of 20pc on insurance premiums (up to €1,000 p.a.). It is usually included in the premium quoted.
Anything you don’t claim from your health insurance policy is allowable as a tax expense. Using the Med1 form, or on your annual tax return, just put in what you have spent that was not recoverable – including GP visits, outpatient charges and medicines – attracting 20pc tax relief. You don’t need to send in all the receipts, but should keep them available in case they are checked.
Cash Plans
If you can’t afford hospital insurance, you should consider a cash-back plan such as HSF (hsf.ie) which pays you an amount for certain procedures or visits. They’re priced from €15.70 per month.
Loadings
Lifetime Community Rating rules mean that a load of 2pc of the gross premium will apply for every year of age higher than age 34 on individuals purchasing their first private health insurance. That means a 50-year-old gets the same cover as a 30 year old, but pays 32pc more for it.
The loading lasts a maximum of 10 years. Loadings don’t apply to insurance ‘cash’ plans, just inpatient policies.
Switching
Most insurance contracts are for 12 months. There is no penalty for switching insurers at your renewal date. However, if you switch insurers mid-term, the insurer may apply a cancellation fee, typically €25 to €50.
