Making Cents: Thousands have inadequate health insurance cover

Next month marks four years since then-Minister for Health Leo Varadkar introduced Lifetime Community Rating (LCR) into the health insurance market, in order to encourage people to take out private cover.

Under the LCR loadings, if you are over the age of 34 when you first take out health insurance, you will have to pay extra for your cover. 

It works out at an extra 2% of your premium for each year above 34, up to a maximum of 70%.

The approach appears to have worked — based on CSO population estimates, the percentage of the population with inpatient health insurance plans stands at 45.4% at the end of September 2018.

But a health insurance expert is warning that, of the approximately 100,000 who took out cover for the first time in the months leading up to the introduction of LCR, half opted for very basic entry level plans.

Dermot Goode of Totalhealthcover.ie says that many people have not moved on from this dated basic cover and he has seen a number of issues arise as a result.

“On the one hand, we see people who didn’t realise that what they signed up for was extremely basic, with many benefits stripped out to make the plan as cheap as possible,” Mr Goode said. 

Now something happens and they find out they don’t have maternity cover beyond the minimum, or they can’t access private scans or private procedures.

Mr Goode says clients have an expectation health insurance will provide access to any hospital and control over their choices, be it of doctor or room type. 

But people need to realise that is not covered under entry-level plans.

TotalHealthCover.ie have outlined some of the failings of these plans and they include: minimum cover only for maternity services, costly for child dependents, don’t provide any refunds on out-patient expenses, don’t cover any private hospitals, don’t cover MRI scans in private hospitals and some don’t even cover every public hospital.

“This is a warning for people who think they have fantastic cover, Mr Goode said. “When they look into it, they find that really they don’t.” 

This advice is not limited to those who took out cover for the first time ahead of the introduction of LCR in 2015. 

TotalHealthCover.ie estimate that around 15% of those in the private health insurance market, approximately 300,000 people, are on these basic entry-level plans. 

Mr Goode likens them to third-party cover for car insurance, covering the basics but not protecting you anywhere to the same level as a comprehensive policy.

Mr Goode suggests consumers look at cover that includes access to all public and standard private hospitals, such as VHI One Plan 250 at €832, Irish Life Health Benefit Plan at €899 and Laya Essential Health 300 at €895.

But while this is good advice for those who can afford it, Mr Goode acknowledges that many others can only afford basic cover. 

However, he says sticking with the plans they took out years ago also harms this group.

“People are renewing each year because they believe what they have is the cheapest they can get,” he said. 

But they don’t realise that while the plan they are on has increased in price, other, cheaper plans have come on the market. They are paying too much for basic cover.

He says families can benefit from shopping around, as a number of providers have special child offers that may mean they can afford better cover.

Laya are offering free cover for the 2nd and subsequent child on three of their plans and they’ve announced a similar deal which will apply through April and May. 

This is a minimum saving of €235 for a family with two children under 18. 

VHI are continuing with their 25% discount for children under 18 on all their One Plans. 

For example, their One Plan 250 is now available for €180 per child. 

Irish Life Health have been running continuous offers for children under 18 on their Select Plus and their new Benefit Plan. 

The cost per child on the latter plan is now down to €179 each, which Mr Goode says is also good value.

Deal of the week

Following on from my article about An Post’s banking options, the provider has announced they are extending their current account €30 for €30 offer until April 14.

To be eligible, customers must open a current account during the promotional period.

They must then make a lodgement of €30 or more in a single transaction to this account either in the month of account opening or in the month following account opening.

Payment of the €30 will be made on the last working day of the month following the month in which the eligible lodgement was made.

An Post are promoting a number of features which they believe make their current account an attractive proposition, including savings wallets, a simple fee structure and a money back offer with a number of retailers, including Lidl.

You can find out full details at www.anpost.com.

If there are any consumer issues that you’d like Gráinne to address or if you have problems that Gráinne could help with, she can be contacted at makingcents@examiner.ie.


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