Increase levy on health insurance policies

The levy on most health insurance premiums is set to increase, in a reversal of what happened last year.

Health Secretary Stephen Donnelly said he had received government approval to increase the annual levy on so-called advanced health insurance contracts to €438 a year.

That will make the levy about a third of the cost of typical adult health insurance.

The increase comes to €32 for the types of plans most people buy.

The levy on so-called non-advanced plans will now increase next year to 109 euros, a decrease of 12 euros.

The current levy was lowered last year, resulting in an annual saving of €45 for most health beneficiaries.

The annual contribution supports the community assessment system that enables everyone to take out the same health insurance at the same price, regardless of their health status and other risk factors – the so-called risk equalization.

Last year the levy was reduced because the Risk Equalization Fund had a surplus due to lower claims during the Covid pandemic.

Vhi is the main beneficiary of risk balancing, which compensates insurers with a disproportionate share of older and ailing customers.

Mr Donnelly said the levies collected by the levy on health insurance contracts do not go to the Treasury.

Minister Donnelly said: “Risk equalization credits and stamp duties are critical to the sustainability of our health insurance market, which is designed to be equitable and fair by spreading the cost of health insurance across the insured population and ensuring everyone pays the same price for the same health insurance product .”

The move to increase the levy for most people with health insurance comes after Vhi and Laya paid rebates last year due to a lower number of Covid-related claims.

Over the summer, Laya Healthcare paid out reimbursements worth around €240 per family.

It was the second time it has returned money since the pandemic broke out.

And VHI Healthcare paid out a third rebate in May, with a family of two adults and two children receiving a typical refund of €400.

Health insurers have saved enormously during the pandemic because fewer people are applying to their health insurers for procedures in public hospitals because of Covid-related overcrowding.

TotalHealthCover.ie broker Dermot Goode said the reduction in the levy on non-advanced plans would only affect about 15 percent of health plans.

He said most people had advanced plans and would see an increase.

Mr Goode said it was hard to figure out why the levy increase was needed when record numbers are taking out health plans and insurers are paying rebates.

He said health insurers would likely pass on the cost of the levy to customers immediately.

https://www.independent.ie/business/personal-finance/insurance/levy-on-health-insurance-policies-to-increase-42170747.html Increase levy on health insurance policies

Fry Electronics Team

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