TWO HEALTH INSURANCE companies say they intend to absorb any extra costs to health insurance after the government increased its levy on health insurance policies.
The government’s levy has been increased from €205 to €285 for adult customers, and from €69 to €95 for under-18s.
The levy goes towards funding tax credits for older health insurance customers, and the increased levy had been brought on by the passage of new legislation late last year to increase the credits for older customers.
Customers aged over 75 can now claim a tax rebate of over €2,000 for the cost of their health insurance – but the increased levy could make it proportionally more expensive for younger people to claim any insurance.
For now, however, both VHI and Aviva say they will not be passing on the increase.
VHI chief executive Declan Moran said the announce was “by no means 100 per cent effective in funding the healthcare costs of older customers”, but that it was nonetheless “a step in the right direction”.
He added that the only way the marketplace would be perfectly competitive was if insurers were equally incentivised to insure a 30-year-old as an 80-year-old.
“As it stands new entrants to the market basically cherry pick younger customers leading to market segmentation and ultimately older customers paying more.”
VHI accounts for 1.246 million healthcare customers, while Aviva – which has 382,000 customers of its own - says it will also absorb the extra costs for the time being.
A spokesperson for the insurer told the Irish Independent that its prices would have to remain under review, however, as it had not expected the levy to be increased by as much as €80 per adult customer.
Quinn Healthcare has indicated that the increases will be “difficult to absorb”, but has not given a clear indication of whether it will be able to do so.
A separate ruling is due in the coming weeks on whether VHI can raise its prices for 2012, after the Budget raised the amount the State charges private insurers for beds in public hospitals.
Read: 334 jobs safeguarded as Quinn Healthcare sold to Swiss group
Poll: Will premium hikes put you off health insurance?
Just click Like.
Comments (13 Comments)