So what’s happening with Health Insurance now?
Some good news for consumers at last!
The Health Insurance market has gone through a difficult period over the last few years with price increases and a fall-off in the number of people continuing with this valuable insurance in place. But now the tide is turning… Some important changes have been introduced to the market, and already we are now seeing some price reductions across the market. However the complexity of the market continues to increase, so to ensure you are getting the best deal possible to fit your particular circumstances, it is very important that you get good independent advice.
So what is this change in the market?
Well the (now previous) Minister for Health Dr. James Reilly, announced at the beginning of July that he has signed into law a new measure called “Lifetime Community Rating”. This is a change to one of the cornerstones of the health insurance market in Ireland. The principle of Community Rating means that everyone pays the same amount for their Health Insurance plan, irrespective of age or when they first take out Health Insurance. This is different to most insurances (for example life insurance), where older people are charged more as they are more likely to result in a claim.
Community rated markets depend on a continuing entry of younger people into the market. Younger people claim less on average and, accordingly, their continuing participation keeps premiums down for everybody. Conversely, if people wait until they are older before taking out private health insurance, premiums will increase for everybody as older people are more likely to claim and insurers take this into account when setting their premium levels.
Lifetime Community Rating will encourage people to take out and continue private health insurance at a younger age, thereby helping to control premium inflation across the health insurance market. The introduction of Lifetime Community Rating provides for late entry loadings on the premiums of those who buy health insurance for the first time at the age of 35 years and older. That means that if you delay taking out your health insurance you are more likely to make significant claims, you will pay more for the insurance than people who took it out at a young age.
The new measure will involve a 2% loading for every year older you are above age 35 when you take out the cover. For example if you are 36 when you take out a policy for the first time, you will pay an extra 2%, if you are 37 you will pay an extra 4% and if you take out cover for the first time at age 45, you’ll pay 20% more every year for your cover. Credit will be provided for previous periods of health insurance and for periods of unemployment since the economic downturn in 2008.
What does this mean for you?
Well there’s good news in all of this on a number of fronts!
First of all, there’s a period of grace… So if you are over the age of 35 and have never had health insurance, or have cancelled your policy in recent years, there’s still time to get into the market without this significant loading. If you’re in the market before 1st May 2015, you’ll pay the same as everyone else – the loading won’t apply, so we would encourage you to get in before 1st May 2015 to avoid the loading.
It’s also important to note that existing health insurance customers who continue to retain their cover will not be affected.
Finally the insurers can now see the market returning to a more sustainable model and as a result, we are seeing a lot of promotions running and new plans being released next month! These are featuring some significant price reductions in some cases. So it’s really important that you make sure that you avail of these opportunities, when taking out health insurance for the first time, re-entering the market or indeed when you’re renewing your policy.
And that’s where Lyons can help. We can help you examine your circumstances, identify your own specific requirements and find the most cost effective plan to meet your needs. Please feel free to pick up the phone to us at any stage and we’ll be delighted to discuss your Health Insurance needs.