Vhi Healthcare has increased health insurance premiums by up to 45%. This has already caused a customer and political storm of protest.
For average family customers it will increase by €331 per annum or €27.60 per month (price of two adults and two children on Parents & Kids) and that the same price increase of 15% will apply to the premiums of 60% of its customers. The price increase will be effective for renewals from February 1, 2011.
Jimmy Tolan of Vhi Healthcare states, “Our customers continue to need to access more healthcare services and we have to set premiums to cover the cost of this. We anticipate that our customers will require 10% more healthcare in 2011 compared to 2010. In addition the recently announced increases in public hospitals of 21% which will increase our healthcare costs by €60 million in 2011 together with further planned increases for 2012 accounted for 8% of the planned price increase.”
Vhi Healthcare will increase the premium for one adult on Plan B by €317 to €1,224 and Plan B Options by €444 to €1,430 from February 1, 2011. This will be an increase of €26 per month for Plan B customers and €37 per month for Plan B Options customers. 29% of Vhi Healthcare’s customers currently have Plan B or Plan B Options.
Jimmy Tolan explains, “Vhi Healthcare can no longer afford to make available the very wide range of cover provided by these plans at the previous levels of pricing. Even with the announced price increases this will not prevent us from incurring significant losses in providing the cover under these plans.”
60% of Vhi Healthcare customers will see the cost of their premium increase by 15% when their policy falls due for renewal. The 15% increase will apply to Vhi Healthcare’s Plan A, Parents & Kids, LifeStage Choices and One Plans. The remaining 40% will see premium increases on Plan B /Plan B Excess of 35%, on Plan B Options of 45%, on Plan C of 25%, on Plan D of 21%, and on Plan E of 21%.
To comply with EU rules on insurer solvency, the state-owned insurer is due to be sold, and it will be hard, if not impossible, to sell it as a going concern if it is loss-making. The other alternative is full privatization, but the state of the Irish economy and the banking crisis, may make this difficult. Health insurance is not compulsory in Ireland. All insurers are losing customers who no longer renew, and the latest increases are likely to see the insurer lose younger healthier customers who are no longer prepared to subsidise older unhealthy customers.