Broker warns rise in claims could trigger further hikes by health insurer

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Further financial pressure is being heaped on hard-pressed families with the news that another health insurer has hiked its prices.

Irish Life Health announced yesterday it was upping its premiums by 5% from July this year, its second increase in the past six months, adding an extra €400 on average to bills.

It is the latest insurer to add to the financial hardships households are experiencing as Laya and VHI both announced increases earlier this year.

It comes at a time when families are being squeezed on all sides by rising mortgage interest rates, grocery inflation and soaring energy costs.

The average 5% rise – of more than €200 on the average plan – means many will struggle to absorb these latest increases as there is no real alternative to private cover as the public system continues to struggle with waiting lists, according to experts.

Coupled with the 4.5% hike issued by Irish Life Health in November, its average costs have now increased by €400.

VHI went up by an average of 4.8% on March 1 and Laya by 4.4% on April 1 which saw similar-sized increases to premiums of around €150 to €200.

Sinn Féin health spokesman David Cullinan has said that ever-growing premiums will put more pressure on families already struggling to make ends meet due to the cost-of-living crisis.

And he warned the nation’s public health system would also be put under greater stress as a result of the price increase.

Mr Cullinane urged private health insurers to rethink their pricing structures as they are forcing people out of cover, meaning less business for the insurers themselves.

He said: “Health insurance premiums are exceptionally high and any increase is going to be extremely difficult for families across the country.

“Any increase or any hike will have a big impact on patients and families and I would say to those providers that they need to be aware of that.

“Many families on lower and middle incomes take out health insurance as they can’t depend on the public system for certain things,” he said.

“We want to end dependency on private insurance by investing in the public system. I don’t want to see any hikes of any kind. But what we will see is that more pressure is being put on families with these increasing costs,” he said said.

“If we have people who then drop out of private insurance altogether, then yes, it will put additional pressure on the public health service, especially for those who need elective procedures.”

It comes at a time when insurance coverage has been rising among the general population.

Research by the Health Insurance Authority found that 47.5% of the population – some 2,365,332 people – had health cover at the end of 2021, compared to 46.4% who had it the previous year.

Despite the calls for calm in the market, Dermot Goodeof Total Health Cover Lockton, warned of the possibility of more increases in the pipeline.

“We can only assume that they will move on their rates again later in the year assuming they’re affected by the same cost drivers – claims – as Irish Life Health,” he said.

It comes at a time when tensions are growing within the Coalition Government about how best to ease the burden on families under increasing financial strain.

Taoiseach Leo Varadkar wants to use the record budget surplus to slash childcare costs by up to 25%, according to reports.

But some in Fianna Fáil perceived the plan as a bid to target its voter base.

A senior party source said: “The budget is still five months away and Fine Gael raising expectations this far out to gain a party advantage was unwise and forces other parties in Government to respond.

“The net result of this approach is that the public end up disappointed, so it’s really self-defeating by Fine Gael.”

Public hospitals have been snowed under with medical cases that were deferred during the pandemic, spurring many patients to go private.

Consequently, Irish Life Health said it saw a “very significant increase” in the volume and size of claims.

The increases, the company says, are being driven by the strong demand for healthcare services, particularly in private and hi-tech hospitals.

Karl Cronin of money advice service MABS said that the increase will lead to many families having to give up their insurance as the cost-of-living crisis continues to cripple personal finances.

He said that the advice from the service is for families to sit down and alter their budgets to prioritize what is most important to that family.

He added that while many families were able to absorb many of the cost-of-living increases, the additional costs being foisted on families are leading many of them to make difficult decisions such as cutting activities for children and adjusting once-comfortable lifestyles.

health insurer hikes
Taoiseach Leo Varadkar has suggested Ireland is short 250,000 homes, which is contributing to inflated house prices and rents. Photo by Leon Farrell/

“There are options out there, such as the medical card, but it’s not something to take lightly,” he said.

“For the last two years, disposable income has been eroded and eroded. There have been many people who have had to cut back on essentials while other families have had to adjust their lifestyles accordingly.”

Irish Life Healthboss Ger Davis blamed increasing costs and the high number of claims for the soaring premiums.

He said: “As pent-up demand for medical services makes its way through a more normalized health system, the volume of claims is higher than previously anticipated.”

A spokesman for Irish Life Health said: “Substantial medical and general inflation has materialized over the last three years in the form of higher hospital costs and consultant fees, and there are also increased requirements for high-cost pharmaceuticals to deliver the best health outcomes for patients.”