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Finance - Money Matters - Health cover – are you paying too much?

Your questions answered by Dermot Goode

The health insurance market in Ireland is constantly changing. Prices are increasing almost every month which is forcing more people to either reduce their cover or exit the market altogether. Almost 65,000 consumers cancelled their cover in 2012 and a further 41,000 cancelled their cover in the first half of 2013.

The sheer number of health plans available makes it difficult for consumers to make like-for-like comparisons. Approximately half of all health insurance members may be insured on the wrong plan, and paying too much for their cover.

Many consumers, who are afraid to change plan or provider, are potentially missing out on cost savings. With approximately 250 plans on the market, examining all plans across all four health insurers is extremely difficult and time-consuming. Consequently, many consumers will simply stay on their current plan rather than risk making any changes to their cover.

To assess if you’re paying too much for your cover, consider the following:

• Are you aware of the protection afforded to all consumers under the health insurance legislation?
‘Community rating’ means that all consumers must pay the same regardless of age, gender or medical history. ‘Open enrolment’ means that the insurer must accept all risks and ‘lifetime cover’ means that insurers must renew your cover annually regardless of how many claims have been made. Insurers must give you credit for waiting periods already served and can’t ask you any questions regarding previous or future medical treatment.

If you have served your waiting periods with one insurer, all other registered insurers must give you full credit for this. If you have been insured with one insurer for 20 years and are switching to an identical plan with an alternative provider, they must accept you and put you on cover immediately. An upgrade rule might apply only if you are upgrading your cover in any way and the insurer should explain this to you.

• If you are on the same plan for more than three years, you are likely to be overpaying
New health plans are being introduced monthly, and in some cases, the insurer will launch a cloned version of an existing plan with a different name but at a much lower cost. Plans like the VHI Health Plus Extra (B Options), Laya Essential Plus and the Aviva Level 2 Hospital all offer excellent cover, but due to successive price increases, there may be other lower cost alternatives that meet your requirements.

• If all family members are insured on the same plan, you could be missing out on cost savings
Families should consider ‘split cover’ where each family member is insured on a plan that meets their personal requirements. Many consumers mistakenly think that all family members must be insured on the same level of cover. Adults can be insured on a high cost plan and children on a lower level on the same policy.

• Many consumers have increased their healthcare cover to cover things like private accommodation in private hospitals (level 3 cover) or provide additional cover for routine medical expenses such as the Health Steps Gold from VHI or Day-to-Day 50 from Aviva
Having the insurance cover doesn’t guarantee a private hospital room – if it’s not available at the time of admission, you’ll be accommodated in a semi-private room instead (no more than five beds in the ward). Unless you think a private room is essential, you should consider dropping to a level 2 plan which will reduce your costs substantially while retaining all of the essential elements of your cover (except for the private room).

If you hold the Health Steps Gold or Day-to-Day 50 plans, you should consider the new ‘corporate plans’ that combine both hospital and routine cover.

Consumers should be aware that everyone can join any plan that’s on the market regardless of what it’s called or who the target audience is. Make sure you consider all plans when reviewing your cover and not just the plans that insurers/providers want you to consider.

• If you don’t review your cover fully at renewal, you may miss out on recently launched ‘special offers’
These vary from discounts on certain plans to half-price cover for children. When these are available, you can leave the adults on one level of cover and avail of the discounted offers for children (split cover if applicable) to save substantially.

New provider, GloHealth, is the only insurer offering free cover for all children under three years on its Better Plan or higher. If one parent wanted to remain with their existing provider, the other parent could join GloHealth with their children to avail of the savings.

Insurers sometimes launch ‘corporate’ plans at very competitive rates for one of their large corporate clients. Watch out for these as all consumers can avail of them.

• Two insurers (Aviva and Laya) have launched lower cost plans that cover certain public and private hospitals only
With good all-round insurance and restricted hospital coverage, these plans are excellent value from €765 per adult for the Aviva plan and €775 (plus 3% Direct Debit charge) for the Laya option.

Having good health insurance cover has never been more important. Public hospital charges continue to rise (eg. the €75 per night public hospital charge will soon increase to €80 for public accommodation), while the cost of semi-private accommodation is around €950 per night excluding consultants’ fees.

These tips could help you to remain insured while making some extra savings.

Dermot Goode is general manager of the healthcare division at Cornmarket Group Financial Services Ltd.

*Any plan benefits or rates quoted are from the Health Insurance Authority effective from 01/09/13 and are correct at the time of print. This information is intended only as a general guide and has no legal standing. Members who have specific questions relating to their personal finances, superannuation entitlements, etc. are advised to seek professional advice and can contact Cornmarket at (01) 408 4000. Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. Telephone calls may be recorded for quality control and training purposes.

Finance - Money Matters - Health cover – are you paying too much?
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