Health insurance: Why you should review before you renew
Most of us shop around for the best deal on our car insurance, but when it comes to health insurance we’re not so quick to switch.
Changing provider or plan isn’t an easy job, but it is well worth setting aside some time each year to review your options.
With almost one million people due to renew their policies between now and February, we’ve asked the experts how you can get the best cover – and value for money.
How often should I review my cover?
The Health Insurance Authority (HIA) is a government body that is the statutory regulator of the private health insurance market.
Laura O’Brien, CEO of the HIA, said she would encourage people to review their policy every year.
“You may find that your medical needs are changing, maybe you want to consider extra cardiac or orthopaedic cover, or if your financial circumstances have changed, you might want to shop around to understand all your options,” she said.
What are the most important things to consider?
From comparing cover, to finding the best deal, the HIA has shared some top tips when it comes to reviewing your cover.
1 Make sure you have the correct level of cover.
If you’re someone who has high blood pressure or if you have a particular cardiac condition, focus on what benefits are provided for cardiac treatment in the different hospitals.
Check what hospitals are covered on the policy.
Not all hospitals are covered on all plans and this can change year to year.
2 Look at the level of excess or shortfall on your policy
Your excess is the amount that you pay per claim or per night in hospital if you make a claim.
Consumers should look to see if their plan has an excess.
Having an excess of €200 means you’ll pay the first €200 – any charge above that amount your insurer will pay.
Generally, plans with higher excess payments are cheaper than those with no or low excess payments.
Be aware that some plans have an excess per claim, while others have an excess per night in hospital. Read the fine print carefully.
3 Set your budget
The average cost of an adult policy is €1,470, which will generally give you semi-private cover in a private hospital.
4 Move your children to a different policy
If you have a family, you may not necessarily be best served with a family plan.
Everyone is priced individually so you should look at everybody’s needs – your children might need better GP cover while you may need better cardiac cover.
Parents and children can be on different plans but on the same policy, or might be better served with different insurance providers, so you’ll have different policy numbers but the renewal date will be the same.
5 Make sure your potential saving is worth it
Be wary of saving €100 on your policy if it means you lose access to the high-tech hospitals and this is important to you, and watch out for changes to excesses or shortfalls.
If you go from full orthopaedic cover to a 20% shortfall (as is common on many plans), then your total out of pocket costs may go up if you have osteoarthritis or rheumatoid arthritis, and you need some orthopaedic procedures.
It might not be worth the initial saving.
How many providers are there to choose from?
There are just three providers to choose from – VHI, Laya and Irish Life Health.
However, that doesn’t mean you’re short of choice when it comes to plans.
Daragh Cassidy from price comparison website Bonkers.ie said there are around 330 different health insurance plans being sold right now.
“That is a huge number – and can make choosing the right plan extremely difficult,” he said.
Health insurance is a very complex product, and Mr Cassidy said the right plan for a specific individual will depend on many different factors.
He also said it can be quite difficult for the average person to understand exactly what’s covered with every policy.
“Treatments, consultant cover, the excess, and outpatient benefits can all differ wildly between plans.
“If you’re not careful it’s very easy to over pay, or equally as worse, under pay and not be covered for the treatment you need,” he said.
Mr Cassidy said there are independent health experts who can conduct an in-depth over-the-phone consultation with you and recommend an appropriate plan.
“Unfortunately Irish people don’t like paying for financial advice,” he said.
“But for a relatively small fee of €100 or €150 say, you could end up saving well over €300 or €400 a year on your health insurance – and you’ll get a plan that’s tailored to your own specific needs,” he added.
Alternatively, you can do the research yourself and use the free comparison tool on the HIA’s website.
How does the HIA’s comparison tool work?
The tool is available on the HIA’s website and can compare all available plans on the market.
You can use the tool to filter options based on different criteria.
It allows you to set your price range, choose an excess and select the type of cover you want.
Once you set your filters, you will be given all the plans that fall within the range you have set.
Are the pricier polices always better?
According to Laura O’Brien from the HIA, the level of day-to-day benefits and coverage for a private treatment in a public hospital, are frequently comparable across different priced plans.
But she said the biggest difference between the high-priced plans and the more economical ones, is around the level of excess or shortfall that a patient must pay for treatment in private hospitals, particularly for orthopaedic or ophthalmic (eye) procedures.
“For example some of the higher priced plans such as VHI Health Plus Premium (€3860), Laya Company Care Premium No Excess (€3740), Irish Life Health Level 2 Hospital with Day to Day (€3900), provide full cover for treatment in private or semi private rooms, with no excess or shortfall payable -other than in limited situations,” Ms O’Brien explained.
“Less expensive plans, such as VHI One+ Plan (€1259), Laya Simply Health Choice (€1275), Irish Life Health Future Focus 500 (€1272) require the patient to pay an excess per claim or per night for all treatments in a private hospital, and many require the patient to pay an additional shortfall or excess for specified orthopaedic and ophthalmic procedures,” she added.
Ms O’Brien said whether the higher priced plans are worth it, will depend on individual circumstances and the likelihood of needing particular types of hospital treatment and access to particular hospitals.
“That is why the HIA always encourages customers to review before you renew.
“We also note that there are plans where coverage such as maternity benefits are more generous on the lower cost plans,” she added.
Is it more expensive to take out my first policy in my 30s?
A loading will apply to anyone who is taking out health insurance for the first time if you are 35 or over.
If you’re 34 and below and you take out health insurance for the first time, you just pay your premium, Ms O Brien explained.
“From 35 and onwards you pay an additional 2% loading on the plan you pick, and the loading increases by 2% every year.
“So at 35 it is 2%, 36 is 4%, 37 is 6% and so on. Loadings apply to your premiums for ten years and can run to a maximum of 70%,” she said.
Ms O’Brien pointed out that if you allow your insurance to lapse for more than 13 weeks, then a Lifetime Community Rating (LCR) loading may also apply, but credit will be given for periods of previous cover.
Why are health insurance premiums rising?
The health insurers and private hospitals claim that premium increases are due to medical inflation, driven by the adoption of new technologies and techniques, together with the use of more expensive consumables and drugs.
The Covid-19 pandemic has also led to some increases, arising from lower throughput due to the impact of social distancing and increased cost of PPE.
At the same time, there are factors that should limit rising premiums, as Ms O’Brien explained.
“Stamp duty on health insurance contracts is due to fall from April 2022.
“Treatments that previously required overnight stays are now being done as day cases, reducing the cost of treatments.
“This accelerated over the last 18 months due to Covid and we expect that to continue,” she said.
Ms O’Brien said increased day-case treatments should feed into lower health insurance claims.
Do we need more competition in the market?
With over 300 different health insurance plans available, the HIA said the market would probably benefit from fewer plans rather than more, with less complexity in the plans.
Ms O’Brien said the average adult premium price of plans held by customers in September 2021 was €1470.
“For plans priced between €1200 and €1500 for an adult, Vhi had 33 plans in this price range, Laya had 24 and Irish Life Health had 21.
“The difference in benefits between them can be small in many cases, and acts to confuse rather than help customers in trying to get the right plan for their circumstances,” she said.
Rather than always adding new products, Ms O’Brien said the HIA would like to see more competition between insurers in relation to the quality of services provided and claims efficiency, which she said would lead to more competitive prices.
“We would also call on the insurers to be more transparent regarding what procedures are covered in different hospitals, and what are the costs of particular treatment that are subject to shortfall payments,” she added.
Am I missing out if I don’t review my policy every year?
Simply put, yes you may be missing out.
With medical treatments and technology rapidly changing, Daragh Cassidy from Bonkers.ie said you don’t want to be left on an old and outdated plan that doesn’t have adequate cover for modern day medical needs.
“For example the most up-to-date plans will provide cover towards things such as the HPV vaccine, online doctors, genetic testing, sports-related injuries, home birthing, gender reassignment, and psychiatric and mental health treatment, which older plans may not,” he said.
So, while it may not be the most exciting job, you should probably set aside some time in the New Year to make sure you and your family are on the best plan possible.