Laya warns further levies could lead to health 'meltdown'
IRELAND'S second-biggest health insurer has warned the Government that further increases in levies and medical costs will drive a sector already in crisis into meltdown.
Laya Healthcare will today outline a series of proposals which it says will help stabilise the Irish health insurance market.
The Cork-based insurer, which has almost 500,000 members, has staunchly supported the proposed lifetime community rating, increased regulation of state-owned VHI and other measures aimed at driving cost efficiencies within the healthcare sector.
Laya boss Donal Clancy has already sent a detailed briefing proposal to Health Minister Leo Varadkar and Finance Minister Michael Noonan on the crisis now gripping the private healthcare sector.
Since Ireland's economic crisis erupted in 2008, almost 300,000 people abandoned private healthcare.
Almost nine out of 10 cited spiralling policy costs as their primary reason for opting out.
On average, between 6,000 and 7,000 people a month are cancelling policies on affordability grounds. They then have to rely on public healthcare.
Fears are mounting that unless health insurance costs are reduced, the sector could lose 500,000 customers - one in four clients - by 2015/16.
"Laya Healthcare is asking that no new penalties, namely an increase in levies or a further cap on tax relief, are introduced in Budget 2015," Mr Clancy said.
"The sector is in crisis - that is obvious for everyone to see. It is simply not sustainable for the long-term if the current situation is allowed to continue."
Policy costs have soared in Ireland since 2008.
In January 2009, a basic private healthcare plan for two adults and three children cost €158-a-month. The comparable policy today costs €278.
Healthcare firms such as VHI, Laya and Aviva are concerned that if the numbers quitting the sector continue to increase, the costs for those with policies will continue to rise.
Ireland currently has around two million people with private health cover. However, if the rate of subscribers quitting the sector continues, one quarter - or almost 500,000 - will have opted out of private health cover by 2015/2016.
Despite the overall health industry decline, Laya has increased its market share and is the second-biggest operator.