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VHI to hike premiums by up to 12.5 per cent

More bad news for already-stretched household budgets as insurance costs have now risen by up to 65 per cent in the past 13 months.

Image: 401k via Flickr

HEALTH INSURER VHI Healthcare is to increase its insurance premiums by up to 12.5 per cent in March this year.

The hike is another in a string of increases by health insurance companies in the past 12 months. This time, families and individuals will see their annual payments jump by an average of 9 per cent in March.

Annual premiums for a family of two adults and two children will increase by between €127 and  €281, depending on the plan they are signed up to.

Individual premiums for the popular HealthPlus Access and HealthPlus Extra will rise by €112 and €183 respectively. At  €1,364, the cost of the HealthPlus Access plan (formerly known as Plan B) is now 50 per cent more expensive than it was in January 2011.

The HealthPlus Extra premium has risen by 65 per cent in the past 13 months. Up from €986 in January 2011, premium holders will now have to pay €1,644 for a year’s cover.

VHI defended the increase, stating its is necessary to fund the healthcare needs of its customers which have risen by about 15 per cent since 2009.

Chief executive Declan Moran cited an increased demand and higher claims as reasons for the price rise. In 2011, €1.2 billion was paid out to VHI customers.

The average claim is about €980.

Moran added that the decision was taken to ensure the organisation is sustainable as the market contracts. Vhi Healthcare’s private health insurance business is currently loss making.

Today’s price increase is the lowest possible amount we could introduce to ensure we can meet the cost of our customers’ healthcare needs in 2012.”

The company again pressed the line that the market was yet to be equalised as older customers continue to be “significantly loss making”. It called for a “comprehensive risk equalisation scheme” to make it as attractive to insure an older, sicker person as a younger, healthier person.

If this does not happen, the market will continue to segment, it said in a statement.

VHI had previously indicated the price hike, warning that premiums could jump by up to 50 per cent as a result of health reforms outlined in the Budget for 2012. The changes include charging private patients for the use of beds in public hospitals or if they attend the Emergency Department.

Earlier this month, Quinn Healthcare introduced two separate price increases.

Aviva’s health plans are also increasing this month – a third rise in just over a year.

The price increases have been criticised by opposition parties, with Fianna Fáil noting that at least 60,000 people have dropped out of the market in the past 12 months.

About 5,000 people per month are leaving their private schemes, making them dependent on the public health system.

Did you get a letter from the VHI this month regarding your policy? If so, and you’ll like to get in touch about its policy changes and price increases, contact the author on Sinead@TheJournal.ie or the team on tips@thejournal.ie.

More: Quinn announces second health insurance price hike of 2012>

James Reilly to blame for rising health insurance costs – FF

Poll: Will premium hikes put you off health insurance?

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