Health Insurance premiums to increase due to the cost of funding claims of older people

Regulations planned by the Government to protect older people from increases in the cost of health insurance are to come into effect soon. Ironically, this will mean price increases for younger policy holders, in particular, families. This is a common practice in the healthcare cover industry called risk equalisation where the cost of servicing the claims of older people is covered through increasing the premiums of every one else across the board.

It is being estimated that the cost of insuring a family of two adults and two children could go up a further €200. Even though risk equalisation may be fair in the sense that everyone would pay the same price for a particular type of cover regardless of age and state of overall health, such an increase would put pressure on households to maintain their private health cover, placing further strain on the public system.

Those involved in the healthcare industry are no strangers to price rises. In fact, they have witnessed five premium increases in the space of two years. On top of this planned hike, there already is a levy of €285 for each adult and €95 for each child on a policy. The Department of Health is planning for the introduction of a new levy scheme to replace the current one as a more appropriate tool to aiding with risk equalisation efforts.

Although the charges the Government will apply have not been announced, medical experts have expressed their concern over the implications increased levies will have on the health system. Indeed, those who either have a medical procedure carried out in a private hospital or stay in a semi-private room will face the prospect of higher bills. With the current cost of health insurance around €2,000 a year for a typical family with two children, the very health of the industry itself is under strain.

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