Nearly half of the population in Ireland has private health insurance cover but more than 50pc of members may still be insured on the wrong plans and may be paying too much for their cover or they could be missing out on extra benefits. With nearly 340 plans to choose from, there are options to suit all requirements and budgets. Below is a summary of the top tips to help you save money on the cost of private health cover across all insurers, VHI, Laya and Irish Life Health.
Too many consumers are complacent when it comes to their health insurance renewal. For many reasons including fear of change, perceived complexity, misguided loyalty and simple inertia, too many people just auto-renew their cover. This means they’re missing out on new deals and special offers, all of which could reduce their costs substantially.
Older members are more likely to fall into this trap and surveys show that many of these members, particularly those aged 60 plus, are still insured on dated plans some of which have been on the market for 10 to 20 years. The potential savings for these members are between €500 to €1,000 per adult and in some cases they don’t even have to switch insurer to achieve this.
2 Split your cover
Splitting your cover is an excellent tactic to reduce your costs. It means that you can have each member insured on different plans but still remaining on the one policy. Each member has unique requirements which means they should all consider different levels of cover to match their personal profile which helps reduce the risk of overpaying on their premium.
For example, it makes sense to consider higher levels of cover for adults as they tend to be at higher risk of incurring significant medical bills in the event of ill health. In most cases, it makes sense to insure young children on lower plans particularly for very young children who may only need access to public hospitals. Even with adults, it often makes sense to split their cover based on their accommodation preferences, e.g. one adult may want private accommodation in private hospitals whereas the other may be content with semi-private accommodation.
Splitting cover is especially relevant for young families as often the insurers will introduce discounts for children under 18. For example, Laya regularly offers deals where you pay for the first child but all other children under 18 can be insured free of charge (applies to specific plans only). In this scenario, splitting the cover to avail of these discounts could save families up to €300 a child.
3 Take on a private hospital excess
This is an excellent tactic to generate savings but is often misunderstood by consumers. It involves taking on a small excess typically between €75 to €150 per admission to private hospitals only. This excess will never apply to public hospital admissions and where it does apply in private hospitals it is nearly always per claim or admission — i.e., never per night. In fact, some of the latest plans coming on stream include capped excesses which means that you may only have to pay the excess a maximum of two or three times per year which minimises your risk in the event of multiple admissions.
As the table below shows, taking on a small excess can generate significant savings which means for most consumers the additional risk is more than offset by the considerable reduction in premium.
In some cases, it also makes sense to split your cover across different insurers, e.g. the adults may stay with the existing insurer but you could switch the young adult dependents to a different insurer to avail of a more competitive deal. The advice here is not to let the insurer simply place all family members on the same plan without first considering their specific benefit requirements and trying to match these to an appropriate level of cover.
4 Avoid age loadings
Lifetime community rating legislation was introduced in May 2015 which means that new members joining from the age of 35 onwards will be subject to an additional loading of 2pc for each year over this age threshold.
The purpose of these age loadings was to incentivise people to join earlier to protect the system of community raising which has always applied to health insurance in Ireland. Therefore, if you are considering joining health insurance and you are approaching 35, it’s advisable to take out new cover prior to your 35th birthday to avoid paying these loadings. While 2pc may seem minimal, any loadings will remain with you for a period of 10 years which could be significant over time.
For those who are over this age threshold who have never held cover, the loadings can be substantial, e.g. a 54-year-old joining for the first time will have a 20-year loading which means they will have to pay an additional 40pc each year for the next 10 years.
This loading applies to the gross cost of the plan which is equivalent to an additional €300 a year on a typical mid-level corporate scheme or an additional €3,000 over the 10-year period assuming no price increases.
The legislation includes some exemptions which may allow some members to avoid or reduce their liability for these loadings. For example if you held cover previously, you are allowed full credit for this which can be used to offset the cost of any loadings.
Also if you left Ireland prior to May 2015 and you take out cover within nine months of returning home, the legislation allows the insurers to waive the loadings completely which is a significant concession but one that is often missed by consumers.
5 Check out the best corporate plans
Many consumers get confused regarding corporate versus consumer plans and they mistakenly believe they are not entitled to join these corporate schemes. ‘Corporate’ is a generic term to describe those plans that are designed specifically for the corporate or company-paid sector but the legislation guarantees that every plan launched to the Irish market is available to every consumer irrespective of their age, gender or occupation. Given the target market for these corporate plans, they tend to represent the best value for money in terms of both benefits and pricing. All corporate plans tend to have the following common features:
⬤ Cover for all public and standard private hospitals with a small excess per claim;
⬤ Full cardiac cover in the high-tech hospitals based in Dublin;
⬤ Guaranteed refunds on eligible out-patient expenses with no excess to pay first, which is commonly referred to as ‘day-to-day’ cover.
A summary of some of the best ‘semi-private’ corporate plans is provided below:
6 Be sensible with your accommodation preferences
Many members don’t fully consider the difference between semi-private and private accommodation. Semi-private in private hospitals means up to five beds in a ward but in many of the newer hospitals such as the Beacon Hospital in Dublin, their semi-private wards usually have two beds only.
Private accommodation in private hospitals obviously means one bed in the ward but even though you might hold this cover, this is never guaranteed. If private room accommodation is not essential for you, you should consider reducing your cover to semi-private which in most cases will be less expensive and you will always be able to access semi-private accommodation in standard private hospitals.
Many consumers particularly those who have never fully reviewed their cover requirements, are shocked to find that they are paying a higher premium for something that is not essential to them and is never guaranteed. Bear in mind also that if two adults are on the policy and one wants to maintain the cover for private room accommodation, they can split their cover as highlighted in point number two above.
The next table provides examples of potential savings by reducing your cover from private to semi private accommodation in private hospitals. Please note all these plans provide private room cover in public hospitals but, as we all know, it is highly unlikely that this will ever be available to you.
7 Avoid dated plans
As mentioned previously, too many consumers remain insured on dated plans some of which are in the market more than 20 years. While these plans still provide good cover, they no longer represent good value for money and should be reviewed as a matter of urgency. Older members are especially fearful of changing cover especially those with underlying medical conditions but the legislation is very protective of these members as they get full credit for all previous membership and they will not have to re-serve any waiting periods if they opt to switch to a different plan or provider.
For those considering changing cover, they should disclose all medical conditions to the new insurer and have them confirm that everything will be fully covered as per their previous plan so they can switch with confidence. It’s understandable that older members are reluctant to take any risks with their cover and a positive trend that we’re seeing in the market is where younger family members are taking on the task of reviewing cover for elderly parents or other family members and they are generating significant savings for them while still maintaining an excellent standard of health cover.
The table below gives examples of some plans which we believe may not represent the best value for money and we would encourage all members on these plans to consider reviewing their cover in advance of their next renewal. Bear in mind that VHI members are only permitted to change their cover from their renewal date whereas Laya and Irish Life Health members can amend their cover mid-year if needs be.
8 Young adult dependents
Many parents keep their young adult dependents insured on the family policy until such time as they commence full-time employment. However, they fail to review the market properly for these dependents and in some cases they end up paying the full adult cost once they turn 18 as they’re not aware they can avail of young adult rates, which can reduce their costs significantly.
This is especially relevant for Laya members who are still insured on dated schemes. For example the Flex 125 Explore scheme costs €411 per child but once they turn 18, the full adult cost of €2,008 applies. By switching their 18 to 20-year-old ‘young adult’ dependent to the Laya Inspire Plus scheme, they can reduce the cost for this dependent to €673, which is a massive saving of €1,334. VHI and Irish Life Health also offer good rates for young adults, e.g. an 18-20 year old will cost €420 on the VHI Company Plan Plus Level 1.3 scheme and €432 on the Irish Life Health Benefit Access 300 plan.
9 Avoid those high excess plans
Many consumers who shop around for better value focus purely on cost rather than benefits. They typically end up on plans such as VHI FirstCare 500 Day to Day (€744 per adult); Laya Control 600 Connect (€1,055 per adult) or Irish Life Health Benefit Access 500 (€790 per adult).
While each consumer will have a different perspective on both risk and affordability, members on these plans need to understand these are low-cost because they are high risk in that you will have to pay a significant excess on every private hospital stay. For example on the Laya plan, an excess of €600 will apply to every hospital admission or €175 will apply to every day-case procedure (private hospitals only).
In the event of ill health requiring multiple admissions, the savings generated by opting for the lower plan will be wiped out by the excesses that must be paid. While some private hospitals may waive shortfalls on certain major orthopaedic and ophthalmic procedures, they will not waive these excesses.
If you decide to upgrade to a better plan in the future, the upgrade rule which applies equally across all insurers means the higher excesses will still apply for any conditions that were present prior to you making the change. The advice here is to always consider the worst case scenario and if you are taking on a high level of excess then just make sure this will be affordable if you have to attend private hospitals for your care.
10 General advice
There are many other areas that could be considered to help consumers avoid the many pitfalls which could cost them dearly. For example:
⬤ Claim all tax reliefs available such as the 20pc relief on eligible out-patient expenses not covered by your insurer or tax relief on your premium where it is fully company-paid;
⬤ Watch out for special deals for young families which may be in the market. One call to each insurer prior to your renewal will help you establish if there are any deals available;
⬤ Finally, the best advice to avoid potential shortfalls but also to avoid overpaying on the premium is to check everything in advance with your insurer prior to any admission or prior to your renewal date just to make sure your cover is up to date and fit for purpose. If you’re fearful of change, just seek independent advice and let someone else do the work for you.
Dermot Goode is a Health Cover Analyst with www.totalhealthcover.ie
All prices quoted are net of tax relief at source and are correct as of August 1 as per information from the health insurers. All comparisons are for information only and should not be considered exact equivalents to the plan held. Before changing plan or provider, refer to the policy terms and conditions and check everything with the insurer before switching cover.
https://www.independent.ie/business/personal-finance/health-insurance/private-health-insurance-10-ways-to-stop-paying-too-much-and-to-get-more-benefits-for-your-money-41892011.html Private health insurance: 10 ways to stop paying too much and to get more benefits for your money