We have said this before and we will say it again: if you’ve not reviewed your health insurance in the past three years, you’re almost certainly wasting money. The reason we’re saying it again today is because, for many people, renewal time comes at the end of this month so now is the time to act to ensure you don’t waste hundreds – if not thousands – of euro over the next 12 months.
We say all this knowing full well that many of you will not listen. The most recent annual report published by the Health Insurance Authority (HIA) made it clear that the number of people prepared to switch health insurer to save money has “plateaued” despite the savings that can be made by shopping around.
And it is not as if those numbers were great in the first place. According to the HIA, only 22 per cent of people with health insurance have ever switched and among those who never have, just 10 per cent have even considered doing it.
The report also suggested that the “dynamic behind the propensity to switch is changing” and among those who switched, cost considerations were not cited to the same degree as they once were. All told, 54 per cent of switchers mentioned price as a factor in last year’s report, a significant drop from 65 per cent in 2015.
The best advice is to avoid auto-renewing
Another element of the HIA report that is worth highlighting again is the fact that the over-60s pay an average of 33 per cent more for their premiums than a younger cohort because of careful “market segmentation” by insurers. This is despite the fact that insurers are not allowed to discriminate based on a person’s age.
The price differential comes about because older consumers tend to have a greater requirement for full orthopaedic cover and that is usually found only on the most expensive policies. Older consumers are also more reluctant to switch plans and or insurers even though they can not be penalised for doing so.
If you don’t believe us when we highlight the benefits of shopping around for health insurance, believe the chief executive of the HIA, Don Gallagher. He has described the private health insurance market as “dynamic” and pointed out that insurers are “competing and introducing new products at a range of price levels and cover options. Therefore, it is important to reiterate there is value in the consumer actively checking their cover and to be prepared to switch insurers to get cover at the right price.”
So with all that in mind we thought we would answer some of the questions you may have.
Is private health insurance really necessary?
For some it is a luxury they can’t afford. For others it’s something they can’t afford to do without. While there are undoubtedly many problems with our public health system we are still better served than in many countries and if you have a heart attack, a stroke, are involved in a car accident or have to be rushed into an emergency department suffering from some other ailment, you will most likely be treated at little or no cost in the public system. In such circumstances, health insurance is redundant and even if you have it you will probably find yourself stuck on a trolley at some point.
So if I’m going to be in a public hospital anyway, should I cancel my policy?
People with health insurance get access to consultants faster – even consultants working out of public hospitals if they are allowed see patients privately. They can also get private and semi-private rooms in public hospitals and can be treated in private hospitals which reduces waiting times for many procedures – both elective and otherwise. Patients in the public system can often be left waiting months, if not years, before they get to see a consultant. People have lived in great pain and even died as a result of delays. That is why many people believe health insurance is essential.
How much does health insurance cost?
The most recent HIA report which was published last summer suggests that the average amount paid for a health insurance premium offering inpatient cover was €1,220, compared with €1,177 in 2016, an increase of 3.7 per cent. The figures were based on gross premium levels but child premiums and young adult discounts have a lowering effect on the average, the HIA said.
And who offers it in the Irish market?
As it stands there are three players. VHI is market leader with about 50 per cent of the policies while Laya Healthcare is in second with a 26 per cent share of the market. Irish Life Health is on about 20 per cent.
Are there many polices to choose from?
Oh yes. There are more than 300 different health insurance policies on the market. That is actually a decline on the close to 400 that were available to buy two years ago but the decline has less to do with a push by providers to make things clearer for consumers and more to do with the fact that GloHealth was taken over by Irish Life Health in February 2017.
So you can save me money?
As we have said before, if you have not reviewed you health insurance policy for three years or longer, you are wasting money.
How much am I wasting?
That depends on how much you are paying right now. If you have a very expensive policy, you could be paying thousands of euro more than you need to.
I have looked at switching and it seems complicated
It can be complicated and it is certainly more complicated than it once was but it is still worth putting the legwork in. The rules in Ireland mean all plans have to be made available to everyone but the companies are not legally obliged to tell people about their best deals so – unsurprisingly – they don’t. Instead they roll out cheap corporate deals with confusing and off-putting names, while many of the worst value options have easy-to-remember friendly sounding names.
Can a company ask me about my health if I try to make the move?
Your new provider can ask you only three questions: Who are you currently insured with? What plan are you on? And how long have you been on that plan? It doesn’t matter if you’re planning to have open heart surgery tomorrow, you can switch from insurer A to insurer B today, and insurer B becomes liable for the cost of the procedure. Pre-existing conditions are irrelevant once you already have a policy that covers the treatment.
But I trust the company I have been with for years. Can I trust a new company?
They all claim to be equally trustworthy and they all have to play by the same rules so are equally safe. Even if a company were to disappear tomorrow, all outstanding costs would be covered and you could switch to an alternative without any loss of cover.
So will I lose cover if I switch?
No. If you move from one insurer to another, the new company must give you full credit for time spent with other insurers and they can not penalise you for prior claims. If you are switching to an equivalent plan, then you are fully covered immediately; if you upgrade your cover, then the additional benefits may not kick in for period.
How can I find the best plan for me?
The Health Insurance Authority website – hia.ie – should be the first stop. It has details of every plan on the market and a comparison tool that lets you see how your existing plan stacks up against other policies. Brokers are also worth considering. And you should ask your insurance company for information.
But what should I ask them?
Make sure your questions are very specific. Your calls will be recorded, so if they don’t tell you the truth, it is their head on the block. A good starting point is: “Have you any plans across your entire range – including your corporate plans – which are equivalent to the plan I am on and how much do they cost?”
You should also ask what cover you lose by switching. The key thing is to put the onus on them to explain everything. Do not allow them to fob you off with some line about sending you a brochure in the post for approval. Then the onus falls to you to read the brochure. If you don’t understand something or if it is even vaguely unclear, make them explain it again. And again. For as long as it takes.
What is the story with excesses?
Anyone who is struggling to cover the cost of their current plan needs to look at excesses. If you take on an excess on inpatient care in private hospitals and are prepared to pay a €2,000 shortfall for certain orthopaedic procedures, the cost of a policy can fall from more than €1,400 to about €800 a year. If you are in reasonably good health and can cut the cost of your cover by €600 by taking on some excesses, then you should look at that, but if you are in poor health or have a pre-existing condition, then taking on new excesses to save money is not something I would recommend.
So what kind of deals are out there?
We asked health insurance expert Dermot Goode of totalhealthcover.ie for some guidance here. "Young families can make excellent savings by shopping around," he says, highlighting just a couple of the big savings that can be made while staying with the same company. A family of two adults and two children will pay a total of €3,966 for VHI's Family Plan Plus L. However, they can get much the same cover with VHI for €3,108 – a saving of €858 or 22 per cent – by switching to VHI's PMI 3613 Corporate plan.
The same two adults and two children who have the Flex 175 Plus plan with Laya Healthcare are paying €4,012 but if they switch to the Simply Connect Plus Corporate plan, the annual cost falls to €3,060, a saving of €952 or 24 per cent.
Meanwhile, if they are with Irish Life Health and are paying €4,018 for the policy called the Better Plan and switch to the 4D Health 2 Corporate plan, they could see their annual bill fall to €3,028, a saving of €990 or 25 per cent.
“Many older members are still insured on very dated plans costing in excess of €2,000 per adult,” Goode says. “They stand to make the biggest savings from shopping around. We see more children now reviewing cover for elderly parents to help them generate much needed savings.” He says three policies offering “excellent private room corporate plans” are VHI’s Company Plan Extra Level 1 which costs €1,548 per adult, Laya Healthcare’s Care Select which costs €1,522 and Irish Life Health’s 4D Health 4 which costs €1,466.
He stresses that all the plans he lists are not like-for-like and product differentials will apply.
“The best advice is to avoid auto-renewing,” he stresses. “Too many consumers simply let their cover roll over each year without contacting the insurers to check other options. Just as you would car or home insurance, shop around each year prior to your renewal date in case there’s a better option available to you. If it’s too much for you, seek independent advice and let someone else do the research for you. You could be pleasantly surprised.
Dos and don’t when reviewing health insurance
- Do remember that you are paying too much if you have been on the same plan for three years or more.
- Don't automatically have all your family on the same plan.
- Do look at small excesses on your plan and check out corporate plans.
- Don't forget to ask for discounted rates for children under 18 and discounted rates for adult dependents aged 18-25.
- Do remember that Irish legislation is very protective of consumers and you must be given full credit for time spent with your previous insures.
- Don't be put off by the names and remember that you can join any plan regardless of the name of the scheme.
- Do remember that once you have served all your waiting periods, they do not have to be served again and if you are switching to an equivalent plan and have served all your waiting periods, you will be covered immediately on joining. All the insurer will ask for is details of your existing cover and how long you've previously been insured.
- Don't think you can be restricted for any pre-existing conditions or pending medical treatment, you can't.
- Don't think you will be charged age loadings unless you are over 34 and joining for the first time.
- Do remember that once you change from your renewal date, there will be no break in your cover whatsoever and you can always switch back to your current insurer at a future renewal date.
- Don't ignore the upgrade rule which applies equally across all providers. If a change of plan gives you better cover, all insurers can restrict your benefits to that payable on your previous plan for a period of two years for any existing conditions. So you will still be covered based on your previous plan.
The questions to ask to get the best deal
1. Ask for the nearest equivalent plan to what you have already
2. Advise the insurer that you don’t mind taking on a small excess to reduce the cost.
3. Have them check all their plans especially their best corporate plans.
4. Stay on the phone and have them explain exactly how any suggested alternative plan compares to your existing cover, ie what you are losing and gaining.
5. Disclose everything to them in terms of existing conditions and likely treatment to get specific answers to all your queries.
6. Ignore any items that are on the plan which may not apply to you such as maternity, psychiatric, convalescence, etc. They must be included on all plans by law.
7. Follow a similar process for each person on the policy as you can split your cover.
8. If you’re happy that the new plan meets your requirements, then switch and save.
