Eliminating hospital fees could result in thousands dropping their health insurance

The government’s plans to eliminate fees for inpatient and outpatient hospital stays next year could prompt thousands of people with low-cost health insurance plans to drop their insurance coverage.

HI said the impact on its claims costs was “negligible,” making it unlikely to respond by cutting premiums.

However, Laya Healthcare said any move to eliminate hospital fees would be positive and passed on to members.

The inpatient surcharge of 80 euros per day for a hospital stay or an outpatient procedure – a maximum of 800 euros per year – is one of the charges that patients without a health card or private health insurance have to pay.

By eliminating these fees, patients could save up to 30 million euros annually.

But leading health insurance expert Dermot Goode said some people with “entry-level” plans might choose to forfeit their coverage if they no longer had to pay public hospital fees.

Hospital fees are €80 per night, with a maximum of €800 for a longer hospital stay.

Mr Goode, of broker TotalHealthCover.ie, said some people might also decide it’s not worth having children’s health insurance if fees are removed.

The potential loss of thousands of people with health insurance could be an unintended consequence of the elimination of inpatient and outpatient hospital fees, negatively impacting the overall health insurance market, experts say.

Health insurance companies that only cover the costs in public hospitals are available from as little as 485 euros per adult per year.

This is less than a third of the average cost of an adult premium.

Child insurance can be billed from as little as €135 per year.

Mr Goode said many of those who take out low cost coverage do so to obtain coverage for inpatient hospital charges and to avoid facing age charges on premiums by waiting until they are over 35 to complete a cover.

“There’s a cohort of people on baseline plans who, when fees go away, are going to be like, ‘Do we need an entry-level plan?'” Mr. Goode said.

These people will question the value of entry-level plans and will either cancel their coverage or upgrade to a higher plan.

About 10 percent of health plan holders have entry-level plans, meaning around 236,000 people have these plans.

Many of those on those plans are in their 20s and 30s, he said.

Mr Goode said the elimination of inpatient and outpatient hospital fees “may result in some members leaving young children out of their plans”.

However, one of the main reasons for having health insurance is to avoid waiting lists at public hospitals, allowing those who do have health insurance to be treated more quickly.

That will not change even with plans to eliminate fees, Mr Goode said.

He advised these individuals to consider upgrading to broader coverage before canceling their policy.

He said he regularly hears examples of young children waiting months for routine treatments like a tonsillectomy in the public system.

It’s too early to tell if health insurers will respond to the planned abolition of hospital fees by cutting premiums — or refunding their policyholders, he added.

VHI said it sets premiums based on what it would cost customers to have healthcare in a given year.

“In our view, the impact on claims would be negligible.

“But it’s worth noting that VHI has a track record of returning value to customers when claims have receded,” it said.

Laya Healthcare said: “All claims costs have an impact on premium costs.

“Like all damage costs, the abolition of the public bed fee of 80 euros will have a positive effect on the premiums.”