herald

Saturday 10 December 2016

Price threat forces 80,000 to take up health insurance

Leo Varadkar
Leo Varadkar

THE surge in the number of people taking out health insurance has reached 80,000 so far this year.

The mass desertion of policy holders in recent years has been well and truly stemmed with more than 2.1 million people now insured.

The threat of a loading charge to be imposed on new policy holders over the age of 34 after a May 1 deadline was the major reason for the spike in numbers.

Health Minister Leo Varadkar said 74,000 people took out health insurance in April alone before the introduction of Lifetime Community Rating that day.

This latest boost in membership means that health insurance membership has now risen every three months in the past nine months.

“The number of people covered by health insurance is very clearly rising again, and the six-year trend of health insurance cover has been reversed,” said Mr Varadkar.

“My officials and I are now working on more proposals to improve affordability later in the year.

“I believe that health insurance needs to be made more affordable before we consider how it could be made universal,” he said.

“This increase in the number of people holding health insurance is extremely welcome as it helps to control premium inflation and helps to keep health insurance affordable for all,” said Mr Varadkar.

The introduction of Lifetime Community Rating by the minister addresses rising health insurance premiums and stabilises the health insurance market in the interests of consumers.

Lifetime Community Rating was seen as a necessary change to support the viability of community rating within Ireland’s health insurance system. Without it there would be a continued deterioration in the age profile of the insured population, which in turn would contribute to rising claims and higher insurance premiums for all.

Now that the May 1 deadline has passed, late entry loadings of 2pc per annum apply for people who buy health insurance for the first time at the age of 34 and older, although exceptions will be made for periods of unemployment.

Insurers retain discretion whether or not to provide young adult rates, although where an insurer chooses to provide young adult rates, they must provide the full range of rates within the specified bands.

In March, the minister said the introduction of the Lifetime Community Rating would be designed to get more people in their thirties and forties to take out health insurance now, essentially so it doesn’t go up when they get older.

“The system we have of health insurance in Ireland is all around community rating. Unlike America for example, everyone pays the same. You don’t pay more because you are older or sicker,” he said.

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