THE HEALTH INSURANCE watchdog’s latest report on the Irish market shows that the average premium has increased by almost 11% last year, despite overall coverage reducing across many plans.

It’s yet another example of shrinkflation — when the size or quality of a product decreases, but the price doesn’t — and will particularly affect older people, as coverage for common procedures such as hip and knee replacements has been slashed on many plans.

Health insurance adviser Dermot Goode of Health Insurance Ireland said that the rise in policy prices and the reduction in coverage means people are being faced with “some very difficult choices”.

And he warned that shrinkflation should be a “wake-up call” for policyholders who routinely allow their plans to auto-renew.

“If you do that, you’ll run a real risk of renewing on a plan with lesser benefits, but actually paying more,” Goode said.

Reduced coverage

Insurers are reducing benefits in several ways, including by increasing excesses, bringing out restricted hospital network plans and introducing varying levels of co-payments, some of them with minimal cover. 

“For a lot of people, they’ve no choice but to take on that extra risk just to keep the premium affordable,” Goode said.

“The younger you are, the less worried you’re going to be about needing a full joint replacement or needing to get cataracts removed… but for a lot of older people with underlying conditions, the very reason why they have health insurance is they want certainty of cover.”

He said the reduction in coverage is happening because companies want to continue providing competitive prices and launching more affordable plans while managing the cost of claims.

The price of private health insurance is consistently rising in Ireland, with VHI, Laya, Irish Life and new entrant Level Health all announcing increases this year, citing the increased cost of providing treatment and increased demand for private care.

The Health Insurance Authority (HIA) said this week that in the past decade there has been an almost 10% increase in the number of people on plans with restricted orthopaedic cover.

Plans increasingly have restrictions, co-payments or partial cover for certain treatments, meaning common procedures such as hip and knee replacements may not be fully covered, and consumers may face substantial out-of-pocket costs for the procedures, the HIA found.

Premiums to keep rising

According to Goode, the shrinkflation trend is probably here to stay.

“We have to expect that rates are going to continue to spiral. There’s no easing of that kind of upward pressure on premiums,” he said, adding that this is why customers should review their health insurance policy yearly.

“Irish consumers need to get much better at shopping around, because if they don’t, then, as well as taking on massive increases, they could end up with less cover overall, and that’s that’s obviously not good for anybody.”

He urged consumers to shop around every time their plan comes up for renewal: “The days of staying on the same plan for more than a year are nearly coming to an end, because there’s so much change going on in the market.”

If a customer is spending over €3,500 per adult each year on their health insurance, Goode said “there should be very clear reason for that”. He said other red flags for overspending include being on the same plan for a long time or having a large excess.

The HIA’s analysis indicated that despite this reduction in coverage, Irish people are consistently taking out health insurance policies, with the number of policies growing by 1.2% between 2024 and 2025.

According to the HIA, at the end of 2025, 2.55 million people or almost 45% of the population held private health insurance.

The watchdog said the figures show that while people continue to value health insurance, the rising premiums are causing consumers to opt for cheaper and less comprehensive policies.