herald

Monday 5 December 2016

Consumer Champion: With another insurance hike on the way, it helps to know how to get best deal

Having healthy adult dependents on old dated health insurance cover is a waste of money
Having healthy adult dependents on old dated health insurance cover is a waste of money
'Our monthly childcare costs are almost a third greater than our mortgage' (picture posed)

We know that health insurers are a bit like lemmings jumping off a cliff: once one of them hikes up its prices the others usually follow suit. So, VHI's announcement last week of increases of 1pc-5pc will have competitors rubbing their hands in glee.

The increase adds around €100-€200 to a family plan.

Aviva's last increase was in July, with an average of a 5.5pc jump. Over at Laya, 4pc was added to some plans, with others going up by nearly 12pc.

In Laya's case, it didn't apply across the board, so swapping to a non-increased plan can save hundreds, says Dermot Goode of TotalHealthCover.ie, who adds that moving to a corporate plan can often be the best value.

MASSIVE

Corporate plans are custom-designed by insurers for their big clients - massive companies with hundreds of employees who get better rates than individuals.

However, by law, these plans must be made available to everyone; however the names are deliberately obtuse and with almost 400 plans on the market it's enough to bamboozle the most intent of switchers.

The move to penalise over-35s who buy insurance for the first time bumped up the numbers with health cover, however half of these bought entry level plans for as little as €500. These provide minimal cover, offering only a public bed in a public hospital, no out-patient benefits and not even every public hospital is included!

For anything approaching decent cover you need to spend a minimum of €800 p.a. If you want extras, like a refund of GP fees, it'll tip over €1,000. For a family, that's €2,500 at least - more than your electricity, phone and gas bills combined. So it's worth trying to cut back where you can without compromising.

However, the good news is that you can switch policy, or insurer, every year; there is no loyalty in staying with the same one. You are entitled to do so even if you're in the middle of treatment, but just make sure the new plan covers the hospital, consultant and procedures you're undergoing. Tax relief is available on the first €1,000 for each adult and €500 for every child's premium at 20pc. This is done at source, meaning the prices you are quoted already include it.

Here are my tips when choosing a new plan:

1. Take your time. Recognise the market is a minefield and if you prefer, ask a broker to do the legwork. Some charge a fee, others get a commission from insurers, but all will make the process easier. Use the www.hia.ie site.

2. Decide what you need. Is a private room vital or do you mind sharing? This element will make a huge difference in cost. Do you want out-patient benefits, like refund of GP fees? Are you currently receiving treatment?

3. Split up the family. Covering adults and children on different policies, or even in different companies, can save money (see table).

4. Watch for special offers. From time to time all insurers offer discounts for switchers.

5. If you have never had health cover before, a waiting period of five years applies for pre-existing conditions. Some will reduce this, but you have to ask.

6. Three insurers insist you "co-pay" on joint replacement procedures. With Aviva and Glo it's a flat fee of €2,000; with VHI it's 20pc on 22 procedures while Laya currently doesn't charge. This is important for elderly people to realise as a hip replacement can cost €10,000-€15,000.

7. If you need a procedure, and have good cover, private hospitals can often do deals on procedures. Don't be afraid to haggle!

 

Welcome extension of home plan

It’s great news to see the extension of the Home Renovation Initiative for another year. The benefit, which amounts to 13.5pc VAT back on works costing €4,405 to €30,000, has resulted in 36,543 houses qualifying for upgrades – either full-blown extensions or simply a new kitchen, windows or some insulation, with the €566m tax saving spread among 5,975 contractors, according to the Department of the Environment.

This scheme was brought in for two reasons: people found it difficult to borrow to move house while the banks weren’t lending and so many builders, brickies and other tradespeople had lost their job, it provided an incentive for them to be employed.

It worked. Contractors have to be pre-approved and work must be

completed before December 31, 2016, giving home-owners plenty of time.

If you’re planning any building or renovation work, always get at least three quotes, references and apply for the scheme before you start. Contractors must be fully tax compliant and registered for the scheme.

COVERED

That way you’ll be covered and you can reclaim the VAT back over two years on a monthly basis. With loans easier to come by these days, it should provide a breather for those living in too-small houses but who can’t afford to trade up. See revenue.ie or citizensinformation.ie for more information.

 

Parents would prefer more financial support than extra leave from work

page35_childcare.jpg
Childcare is an expensive business

A survey by creche group Giraffe found 83pc of parents would prefer extra financial support for childcare than more parental leave.

With the Government set to announce paid paternity leave for dads and an added fiver in child benefit, it's probably not what they had in mind.

While it's a start, the two weeks being proposed is still a long way off countries like Iceland (91 days), Norway (70 days) or Spain (28 days). Childcare is expensive, and it's hard to shop around as location and quality come first. But every little helps.

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