60% of the VHI’s 1.35m customers will see prices increase by 15% – meaning the average annual family premium will rise by around €331.
Premiums for other plans could see increases of up to 45%.
The company has blamed an expected 10% rise in claims this year and a 21% increase in the cost of private beds in public hospitals for the increase.
The company estimates that this will cost it €60m this year and accounts for 8% of the increase. A further increase in the cost of private beds is planned for next year.
VHI Chief Executive Jimmy Tolan said the decision to increase prices was ‘incredibly difficult’ and not made lightly.
He said the reality was the company was operating in a broken regulatory model which needs to be fixed.
The VHI lost about 48,000 customers in the last year. The last time the company increased its prices was this time last year.
The VHI claims that it has taken many steps in the last year to contain rising costs of health insurance, including cutting consultant and private hospital fees and a €15m reduction in annual administration costs.
The VHI has also called for changes to the levy system which replaced risk equalisation in 2009.
Mr Tolan has described the levy system as ineffective. He said changes need to be made to the tax credit system which provides tax relief on the cost of insuring older customers.
‘I warned Minister Harney repeatedly that her failure to introduce proper risk equalisation, and to substitute it with a levy, would have a catastrophic effect on people’s ability to afford private health insurance.’
Labour’s Jan O’Sullivan said the hike would place huge financial pressure on families.
‘These increases will lead to situation where many policy holders will reduce or drop their health cover, placing yet more pressure on the public health system,’ she said.
- Mary Harney should be tied to a trolley (thepressnet.com)
- What is Mary Harney’s job exactly? (politics.ie)
- VHI to cut payments to private hospitals (politics.ie)
- Another health insurance provider wants to raise rates because of new healthcare laws (seatoshiningsea.wordpress.com)