Customers of VHI Healthcare are facing more price increases after the company said it was raising the average family package by about €331 a year or €27.60 a month. The price increase will be effective for renewals from February.
60% of VHI customers will see their premiums increase by 15%, while customers on other plans such as its Plan B Options will see costs rise by as much as 45%.
VHI says the increase is necessary to cover the cost of providing care for its customers over the next 12 months. It anticipates that its customers will need 10% more healthcare this year compared to last year as age profiles increase.
The recently announced price increases in public hospitals of 21% will also increase VHI's healthcare costs by €60m in 2011, it added.
Families on the 'Parents & Kids' plan - the company's most popular family plan - will see their premiums increase by 15% next month, about €331 a year. Customers on its Plan A, Lifestage choices and One plans will also see increases of 15%.
Premium for its Plan B and Plan B Excess will go up by 35%, while its Plan B Option premiums will jump by 45%. Its Plan C premiums will rise by 25%, while its Plan D and Plan 5 options will see premium hikes of 21%.
VHI's 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.
VHI has 1.35 million customers and in the last year has lost about 48,000 customers. The last time the company increased its prices was this time last year.
The VHI has 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.
VHI's rival Aviva said it was deeply concerned about the decision, and claimed that VHI was operating without accountability.
'Strong intervention by the Government is now an urgent requirement to prevent the VHI from continually penalising its most vulnerable customers with unaffordable increases while simultaneously ignoring the significant cost savings to be made by reforming the VHI,' it said.
Dónal Clancy, the general manager of Quinn-healthcare said the increases were 'a direct result of the inefficiencies of the VHI', adding that they were happening despite an increase in the health insurance levy announced in December.
