The health insurance market is like a complex matrix.
With over 320 plans to choose from, even the most patient can test it.
In most cases, it’s no wonder you leave your policy rolling over when you renew your policy.
However, premiums are starting to rise again alongside goods and services in other parts of the economy, so it’s a good idea to shop around before renewing your policy.
growing market
More than 2.4 million people, nearly half of the population, have private health insurance, according to the Health Insurance Authority (HIA).
Despite expectations to the contrary, the number of people with covers actually increased during the pandemic.
That’s despite a move by health services executives to temporarily take over private hospitals to deal with the potential surge in Covid-19 patients requiring hospitalization.
It was thought that many householders, especially those who may be under pressure from temporary job layoffs, may have chosen to ditch their covers.
But the pandemic seems to have had the opposite effect. The sight of overcrowded medical facilities and the prospect of long waiting lists in the public system seemed to show the value of having some health insurance coverage for people.
With tens of thousands enrolled, the number of insured persons has returned to 2008 levels, which peaked at the start of the financial crisis before declining for the first time in decades.
Insurance premiums are expected to rise
Premium increases have remained relatively modest in recent years.
HIA’s 2021 figures show that average premiums have increased by 2% year-on-year to €1,466, but have fallen again this year.
Last year’s increase was primarily due to higher claims costs, which rose from €1.9 billion in 2020 to €2.1 billion in 2021. But even then his bill for 2019 was just under €2.4 billion.
Health insurers have reimbursed consumers some of their premiums in recent years, recognizing that levels of access to hospital care have declined during the pandemic and subsequent declines in claims. In some cases, those rebates continued this year.
However, the billing landscape is changing again as hospital services return to more normalized levels of activity after the pandemic and inflation is also putting pressure on treatment costs.
“Prices tend to track claims costs,” explains Brian Turner, Ph.D., a lecturer in health economics at UCC.
“Claim costs reflect a growing and aging population that tends to require more medical care, resulting in rising costs for claims,” he added.
In addition, he noted that individuals who may have decided to postpone receiving treatment or canceled treatment during Covid will seek more advanced treatment for conditions that have probably worsened during that time. and that it could contribute further to billing costs.
starter
Irish Life was the first to get out of the trap with its latest round, announcing a 4.5% price increase on most plans that will apply from the New Year.
Insurers said inflation in hospital procedure costs was behind the decision.
Other insurers are likely to follow suit.
Dermot Goode, health insurance expert at Totalhealthcover.ie, said:
“We have heard all sorts of market noise about pressure on rates. All private hospital costs are skyrocketing, all leading to negotiations with health insurers,” he explained. Did.
With medical inflation hovering between 5% and 7%, Goode said he was waiting to see who would be the first to fall.
Peak update period
With up to 1 million people due to renew their policies between December and February, peak renewal season is upon us.
It is no coincidence that price increases tend to coincide with this period.
However, the Irish Life premium increase will start on January 1st. This means that anyone planning to renew before December 31st will avoid the price increase.
“Insurers are looking two years ahead,” explains Dermot Goode.
“Regarding the recent premium increase, we got away with it very lightly. Costs haven’t come down – they haven’t. We’ve just had claims under budget, but [the insurers] Now we expect a complete turnaround,” he added.
He said consumers should expect premiums to rise by 5-7%, reflecting the healthcare inflation environment.
However, he was positive that many plans still offer savings.
He estimated that about half the population was insured with the “wrong plan” and likely overpaid.
Thinking things through, especially getting rid of older plans that have been on the market for up to 20 years, can potentially bring your premiums down significantly.
“The potential savings for these members is between €500 and €1,000 per adult, and in some cases they don’t even have to switch insurers to achieve this,” Goode noted.
Younger Insured Cohort
Premium growth is driven in part by an aging population with generally more complex medical needs, but the insured population appears to be growing among the younger segments of the market, which is encouraging. .
HIA statistics show that from July to the end of September, the number of 18- to 26-year-olds increased, while the number of 26-and-overs remained flat.
A system of price equality for all members, known as Community Rating, essentially covers the costs of older members who sign up for insurance and who are more likely to use insurance more frequently. depends on people. .
To maintain this model, a loading mechanism was introduced in 2015 to penalize late entrants to the health insurance market.
The HIA explains on its website, “If an individual is 34 years of age or older when they first purchase inpatient private health insurance, a 2% contribution of the total premium will apply.”
The introduction of this policy led to an initial surge in the use of health insurance.
Brian Turner said, “Effective May 1, 2015, there was a nine-month grace period during which anyone could obtain a policy without facing any delays in the enrollment process. I did,” he explained.
“Needless to say, 78,000 people rushed into the market at the last minute in April 2015,” he added.
Many newcomers to the market at the time wanted to avoid the burden and opted for entry-level plans that basically covered treatment in public hospitals. This is not free if the patient does not have a medical card, contrary to popular belief.
But since the pandemic, there seems to have been a move toward more sophisticated plans.
“Many people see how limited these entry-level plans are and upgrade their cover.
“The emphasis is on benefits rather than price,” he explained.
But while some opt to upgrade, Goode is eyeing health insurance as one area where he can save as other bills rise exponentially and call for a downgrade of cover. He said there are many people.
All of this will be reflected in price dynamics in the coming months and years.
