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Updated at 12.53
THE HEADS OF Ireland’s main health insurance companies have stressed the need to attract more younger people into market to avoid an increase to the cost of insurance.
The heads of VHI, Glo Health, Laya Healthcare, and Aviva Health Insurance Ireland appeared before the Oireachtas Health Committee this afternoon to discuss measures proposed by government in Budget 2014.
These include an increased health insurance levy which could result in a hike in insurance premiums by as much as 15 per cent, it has been warned.
‘Cost spread out’
They echoed each other’s calls for the government to attract more young people into the health insurance market, as without them the cost of the older and sicker can not be spread out using the younger and healthier clients’ premiums.
Laya Healthcare’s Donal Clancy said that the market has “gone into shock”, and that the government is “has forced young healthy people out of the market”.
VHI Chairman John O’Dwyer said that all health insurance companies “support the government’s policy of community rating, and the plan to protect it”.
Health insurances bosses before the committee today. (Image Credit: Oireachtas.ie)
He also said that the measures announced in the legislation are “cost neutral”.
It merely moves the money around the system, from young and healthy customers to sick and older customers. Contrary to what has been said, it does not cause price increases.
“If insurers balance their books with a mixed profile of customers, the credits collected and levies paid would balance each other out”, he said.
However, Brian Dunne of Aviva Healthcare criticised the government’s cap at which tax relief can apply on premiums to €1000 for an adult and €500 for a child.
People were now paying on average €100 more as a result, he said, and combined with a government move earlier this year to charge private patients for public hospital beds it placed an extra “€300 million on 1.2 million people”.
O’Dwyer also called for a “standard product with a fully effective risk equalisation system” as a precursor to a universal healthcare system.
Risk equalisation is essential. Without it, the market would collapse.
Donal Clancy also echoed the need to reform the risk equalisation system.
Jim Dowdall of Glo Health called for the health insurance levy to be cut, as it would attracted lapsed policy holders back in to the system.
Jim Dowdall, CEO of Glo Health (Image Credit: Oireachtas.ie)
He also called for the lifetime community rating system to be introduced, someone which has not been introduced in Ireland despite it being on the statute books since 2001.
This would result in higher charges for those taking out insurance later in life, with cheaper premiums for those who take it out at a young age.
Originally published 12.29
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It’s no wonder younger people aren’t signing up for healthcare, these guys are basically saying ‘we need your money to pay for older people’. Screw you
Mandatory health insurance levies for every single person once your 18 that gives two free GP visits a year and everything you need in a medical emergency should be free and available..not running to GP every time your child sneezes…why could this not work.
We have enough mandatory levies. PRSI used to cover many health related items which were slowly eroded until now when the levy is still around but the benefits are all but gone.
We had a health levy until a few years ago when it was fused to the income levy and became USC.
So my point is, we pay these levies already and receive no extra services.
The introduction of your suggestion might work at the start but services would be eroded until it was just another tax.
That’s the government’s interference. The government is deliberately sabotaging any chance of a functioning health insurance system here and giving nothing in return. This government hates private health insurance.
Hi Jason, that is how insurance works. We subsidise the elderly now, the next generation will subsidise us. At least, that is the promise.
Except they are subsidising the elderly of australia
Stop hiking the price up and you might get more customers. I’ve been with VHI for 13yrs but I will have no choice but to pack it in if they increase it again. It’s no longer affordable and I have now reached my ceiling. Insurance companies need to wake up and realise that they will loose customers in droves until they stop this rip off.
Nobody subsidised my car insurance when I was classed a higher risk in my younger days.
Why would I as an early thirty something pay for a service I’m unlikely to use, and having not paid, should I need said service will be cared for in the public system.
Health Insurance in this country is becoming an increasingly difficult sell to younger people. Without lifetime community rating it makes financial sense to rely on the public system until later life and only then consider a private policy and therein lies the problem.
its not car insurance though is it? while you could be very very lucky and die at 85 in your sleep without ever setting foot in a hospital, most people are going to run up medical costs costing hundreds of thousand over their lifetime. The only question is what mechanism do you use to “SAVE” for it and not depend on a pyramid scheme to fool people into paying from something which might fall apart in the coming years.
Better open a office in Canada and one or two in aus. That’s where most of the young are.
Its doesnt look sustainable, its only affordable because there was a small pool of older claimants supported by a larger pool of younger people who dont claim so much, in todays money a 30 or 40 something is going to have to pay about ~5-10K per year over the coming years , which might be doable but not with the USC and property taxes on top.
Working people have a fundamental right to be able to fund their own heath care, not have their “disposable” income stolen from them leaving them with shoddy services or unacceptable waiting lists.
Young people need to buy health insurance to pay for older people’s? So you’re saying that young people’s premiums leave you enough left over to lower everyone else’s? Wow, I wonder why young people aren’t buying health insurance.
Private Health care is pricing individuals out of their services, I do hope they are enjoying the salary increases though!!!
Where does the money go. Who gets it. What makes it so expensive . Follow the money and give a transparent breakdown of who gets what.
The biggest factor are hospital charges. Insurers can negotiate private hospitals on costs, lengths of stay, and so on, but they can’t do that with public hospitals. And the single biggest provider of private hospital facilities is actually the public system. And the costs of private facilities in public hospitals is set by the Government, not the hospitals themselves.
I don’t agree with community rating – like other insurance products the more risk you bring to the pool the more you should pay and vice versa. Why should it be any different for private health insurance? Private bring the key word there.
The problem with that is that some individuals will require a lot more healthcare than others, and they are fairly easy to identify. So are we saying that the people who are already the sickest, and whose earning capacity is probably already diminished, are the people who have to pay more to get treatment? And does it make any difference if this is largely self-inflicted (e.g. smoking), partly self-inflicted (e.g. being obese) or not self-inflicted (e.g. congential disease)?
community rate is a scam of sorts but it cant be compared to Car insurance either, it should be seen more like a quasi pension fund and not a pay as you go system. So one should be paying into it from day 1 of work but the benefits accrue over time.
So, as you get older and more infirm, with less disposable income, you should pay more?
Brilliant. Why didn’t we think of it before? No-fault euthanasia.
I can see it in the future when you retire at “75″ instead of being given a bus pass you will be given an arsenic capsule
Yes they should and if they can’t afford it they should return to the public system. It’s nonsense that we are subsidising them.
The problem with that is these governments don’t think long term like that. They can’t see past the next election. Evidence of this is the PRSI system. This used to cover a multitude of dental and optical treatments. Now we’ll be lucky to see our contributory old age pension out of it.
Every working individual is and has been paying since day 1 of work. We have just been robbed of the benefits we were promised because of mismanagement at the highest levels and now we are expected to pay a new levy to cover these removed benefits so they can squander that too. How much do they want?
If there were a functioning public system that wasn’t drowning in patients that are already leaving the private system that is becoming prohibitively expensive, maybe. Until then?
It’s different for health insurance because Governments use health insurance to reduce the burden on the public system.
With no absolutely disrespect to the people working there, the public hospital system is not fit for purpose as it stands now. Can you imagine how much worse it would be if it had to also meet the needs of the hundreds of thousands of people who would find health insurance unaffordable in a risk-rated market?
In an ideal world, the public system would be sufficient for everyone, and health insurance could operate as a risk-rated luxury service. But we’re miles away from that.
Health insurance should be a luxury good for the upper class, we deserve to skip the que
Does your one follower on twitter feel the same aswell?
Upper class my ass, learn to spell before you claim to be upper class.
If your going to skip something, at least learn how to spell it. It’s queue. DUMBASS
I’d agree with the first part of Kenneth’s statement. Health insurance should be a luxury item. Unfortunately, given the state of our public health system, its pretty much the only option if someone wants to make sure they can have quick access to treatment. 45% of the population aren’t holding on to their health insurance in the middle of a recession just for the hell of it.
No kidding.
Here’s an idea geniuses – more reasonable prices!!
the government in its infinite wisdom have chosen to tax the living sh**e out of my wages so i cannot even if i wanted to afford private health insurance.
The real problem with this is the fact the insurance companies are unwilling to have their already incredible profits decrease. If the government is going to charge the insurance companies more, then there needs to be some protection for customers from a direct rise in cost.
Otherwise the government should just simply take €100 from each person with a private health care policy. But this would be more obvious to the average citizen of Ireland therefore undoing all the good work of the press and people could easily join the dots and see where and who is ripping them off. Instead of what happens everyday where the blame is passed around until we really don’t care any more or something more unjust happens and over shadows the front page of the state controlled press.
Insurance and health companies are all virtually bankrupt because the money that you pay in over the years is gambled on the stock market casino.
The only longterm solution is to exit the eurozone and change the system to one similar to the nhs .
There is a looming bond crash and when interest rates rise the insuarance companies won’t be able to pay out. All of this is linked to health care financing.
In leaving the euro the country would be able to create its own currency to refinance hospitals without necessitating interest payments to foreign banks.
Of course that is what they won’t do because the EU politicians are all bought off by the big US banks
have your say