Health Insurance Authority says 75,000 will drop health insurance from July 2011 to December 2012

Thursday 24 May 2012 23.24
The HIA said the market is vulnerable to a cycle of increasing premiums
The HIA said the market is vulnerable to a cycle of increasing premiums

The number of people with private health insurance fell to just over 2.1m people at the end of March, the same number insured in mid-2006, according to the Health Insurance Authority.

The HIA has also warned the Health Minister that an estimated 75,000 more people may drop their cover during the period from July 2011 to December 2012.

It said that the market is vulnerable to a cycle of increasing premiums, leading to more cancelled policies, resulting in further premium rises.

The warning is contained in a report to the Health Minister in December.

Separately, a new survey published today by the authority shows that people view private health insurance as a highly valued commodity, but many are struggling to keep cover due to the cost.

Customers are also now more active in shopping around or altering their cover.

The survey for the HIA was conducted by Millward Brown Lansdowne and involved 1,011 interviews in November last year, before further price rises came into effect at the start of this year.

Most people view their cover as a means to access healthcare quicker and see private health insurance as a necessity rather than a luxury.

The main reason for people dropping their cover is the cost, while loss of employment and employers no longer providing cover are also factors.

The number of people who said they would maintain or upgrade their cover over the next year has increased since the 2010 survey and 86% of people are satisfied with their cover.

The survey shows that people would need to save an average of €441 to prompt them to switch to another provider.

In its report to the minister late last year, the HIA said changes in the last Budget, which saw a rise in charges for private beds, had a substantial impact that insurers were likely to react with price and benefit changes.

In 2012, the annual levy on health insurers was increased by the Government, to cover an increase in the age-related tax relief for older people, to keep insurance affordable for this group.

HIA Chief Executive Liam Sloyan said there was a lot of uncertainty about economic conditions and health insurer behaviour, but he would not change the estimate that 75,000 more people might drop out of cover this year.

He also said he would prefer if customers could switch insurer when they wanted, without penalty, rather than at renewal as some insurers require.

Speaking on RTÉ’s News at One, Mr Sloyan said: "Our research is showing us that consumers highly value their health insurance and that they really want to hold onto it, but that many are facing issues on affordability now between price increases and the recession.

"Affordability is becoming more and more of an issue. What the survey also shows is that people are becoming more active in managing their health insurance."

Keywords: health insurance