“Just when you thought it couldn’t get any worse for consumers, it has”, this is according to health insurance expert Dermot Goode of www.totalhealthcover.ie, who has today signalled the Government’s plans to increase health insurance levies on most adult plans. The 10% increase will come into effect next April.
Dermot explained, “This is not just a levy on insurers – it’s a levy on private health insurance customers. As with any levy the health insurers will have no choice but to pass it on to consumers in the form of higher premiums, which means another round of price hikes for hard pressed consumers. All of this on the back of increases of up to 10% on typical premiums over the course of the last 12months”.
Totalhealthcover.ie say the health insurance market has just begun to see some shoots of recovery but that this measure will now lead to more down-grading of cover and cancellations of policies. The health insurance experts say this could force more consumers back into a public system which simply can’t cope with the existing volumes.
Dermot continued, “Measures like this, together with new public hospital charges will simply stifle competition and discourage any new entrants coming into the market – which means less choice and ultimately higher prices for consumers”.
Totalhealthcover.ie say that in many cases, the levy already accounts for c. 30% of the overall premium. On some lower cost plans, the levy may account for over 50% of the cost to consumers.
Dermot contends, “This announcement comes as a huge blow. The Government really needs to stop targeting the private health insurance industry and those consumers who have no choice but to invest in private cover as they can’t rely on the public health system!”
The Health Levy
The Health Levy was introduced in 2009 and increased by 149% for adults and 155% for children in the six years to 2015. Currently there are two levy rates for adults (€202 and €403) and two for children €67 and €134). The rate applied is dependent on the level of insurance cover purchased with those on more advanced policies paying the higher levy.
Dermot concluded, “Everyone pays the same amount, regardless of what they are paying for their level of cover. The Health Levy has played a big part in pushing up premiums in recent years. And higher premiums are making people turn their backs on private health insurance. These steps seem at odds with the fact that the Government would actually like to see more of us take out private health cover, especially young people. That’s why Lifetime Community Rating was introduced.
Those with private health insurance already pay for healthcare through their taxes, PRSI and the Universal Social Charge. The levy just increases this financial burden”.