Laya Healthcare has announced plans to increase premiums by an average of 20 per cent from March 1st. The health insurer was expected to announce a price rise but it was thought the price rise would be in the region of ten per cent. This follows an average three per cent price rise announced by the VHI earlier this week.
Laya Healthcare said the increase was driven by a number of cost factors including changes to Government policy and the rising cost of claims.
Its managing director Dónal Clancy said the company was very conscious of the impact these price hikes was having on its members. “Unfortunately the market has come under unprecedented pressure from major increases by the Government, specifically further hikes to the Government health levy and the public beds redesignation charge,” he said.
Mr Clancy said the net cost of the Government health levy to Laya would be about €72 million this year - an increase of 33 per cent compared to last year. The public beds charge would cost the health insurance industry about €130m this year. “We are forced to pass on these charges to our already hard-pressed members,” he said.
The company has almost half a million members, compared with VHI’s 1.2 million subscribers.
He said the Government’s actions were accelerating the dropout rate of health insurance subscribers. “A record number of people left the market last year and, most worryingly, the number of people under 30 with health insurance fell by ten per cent,” Mr Clancy said.
“This means that cost increases, whether from the increased health levy or public beds charge, have to be passed on to members through their premiums. But this rising cost of premiums is only driving more people out of the market, leaving the cost burden on those remaining who are generally older and sicker.”
He warned that the acceleration in the decline of consumers with private health insurance would create huge problems for the Government’s reform agenda, “particularly the transition to universal health insurance, which is stated Government policy”.
Mr Clancy claimed Laya’s Essential Secure scheme was still the best value health insurance plan on the market at €514.55 per adult. He said the company had introduced a new online health insurance tool -Create Your Scheme - which would help members to control the price they pay by choosing the level of cover and in-patient excess they required.
