As with the pensions industry, an ageing and longer-living population will pose significant challenges for the private health insurance market in the years ahead.
Projections suggest the number of people over the age of 65 will increase from below 600,000 to about 850,000 within the next decade.
In addition, the prevalence of chronic disease could rise by 4 or 5 per cent over the same period, according to the Irish Medical Organisation.
It predicted that those over 65 with hypertension or high blood pressure will rise from 320,000 to 420,000; the numbers who have had a stroke will increase from more than 18,000 to nearly 25,000; and the incidence of diabetes will rise from 68,000 to nearly 94,000.
Rising claims
For health insurance companies, rising numbers of people with illnesses translate into increasing claims, and soaring claims cost significant amounts of money.
In a stark submission to the new Oireachtas committee looking at the future of the Irish healthcare system, VHI – the country’s largest health insurer – warned that these pressures could undermine the private health insurance system, which has been in place since the 1950s.
"Ireland currently has the youngest population in Europe, but it is projected to age faster than any other European country over the next 20 years," the company's submission says.
“This will raise many challenges for Ireland with the delivery and funding of high quality healthcare being among the most prominent and immediate of these challenges.
“Healthcare utilisation is strongly correlated with age and the projected increases in Ireland’s population of over 65 year olds, coupled with projected increases in the prevalence of chronic diseases are going to present profound challenges to Ireland’s healthcare system.”
Challenge
The VHI adds: “The pace of ageing is likely to overwhelm the already stretched health system unless there is significant planning and forethought on tackling this challenge in advance.”
By 2025, the insurer forecasts, the cost of meeting claims will increase by 80 per cent from €1.9 billion to €3.4 billion. “It was difficult to see how the market could withstand such additional costs,” the VHI submission says, warning that the private medical insurance model would “struggle to sustain itself in the longer term given these challenges”.
VHI said 75 per cent of health spending went on the management of those with chronic illnesses, so it was imperative that a strategy be put in place to deal with the needs of such patients.
It also urged that insurers be allowed to negotiate directly on costs with public hospitals.
