Doctor! Doctor! My health insurance is haemorrhaging cash

Have you had the same health insurance policy for the last three years? You have? Then you are wasting money. End of story.

How much you are wasting depends on your level of cover, but it could easily run to thousands of euro. And if you don’t do something about it now, you might well have to wait a full year before you can stop pouring money down the drain.

As the new year dawned, a reader contacted Pricewatch looking for advice about his health insurance policy. This reader and his wife were with Laya Healthcare and had the once-popular Health Manager Silver policy, which they had signed up for many years ago.

This very comprehensive plan offers top-notch cover in all the public and private hospitals in the State, including cover in a semi-private room in a high-tech hospital. The problem is not the cover but the cost. It comes with a price tag of just over €860 a month – or €10,368 a year – for the couple.

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In the space of 10 minutes, Pricewatch was able to save them €2,000 without reducing the level of cover they had in any significant way. The savings were possible by either switching to rival insurers or sticking with Laya but switching to a different plan.

We did not recommend any particular policy, but directed them instead to the Health Insurance Authority website (hia.ie) where they could make comparisons themselves. And we also encouraged them to call several companies armed with the knowledge they had gleaned from us.

Time to review

It is not every day we get to save a couple €2,000 in just 10 minutes. It was possible because of many conversations we have had with

Dermot Goode

, Ireland’s leading health insurance expert and the founder of totalhealthcover.ie.

As many as 400,000 health insurance policies will come up for renewal this month and about 1 million will fall due for renewal the first half of the year. So now is the time to review your cover and see if there is money to be saved. And there will be.

“On many levels, January is the worst time for renewals to come up,” Goode says. “Most people are caught up with Christmas in December and don’t pay too much attention to health insurance. And when January comes they are preoccupied with other things. So the first time they think about their health insurance policy is when the first deduction comes out of their account, and at that point it is too late to think of renewal for another year.”

By Goode’s reckoning, 2016 was not kind to health insurance customers: many faced premium increases of up to 13 per cent.

VHI and Laya customers were hit with two main increases last year, with some plans going up by more than 10 per cent. Laya announced a third hike to come into effect this month, which will add 5 per cent onto the cost of many policies. GloHealth increased the cost of many of its plans from December by an average of just under 6 per cent and Irish Life Health announced an average increase of 6.3 per cent from the beginning of the year.

All the increases are averages, which mean some plans will go up by substantially more.

Analysis of some plans by totalhealthcover.ie shows that families could save €780-€2,995 depending on the plan held and their renewal date. Those members on dated level 1 plans (public hospital cover only) could save €150-€880 by upgrading to a more recent level 2 plan (public and private hospital cover), and they will also benefit from better overall cover.

“A lot of older people stay on plans they have always been on out of fear,” says Goode. “Insurers know this, and they know that all it takes is for them to sow one tiny element of doubt in a person’s mind and they won’t switch.”

Give full credit

Shopping around for health insurance can seem complicated, with more than 300 plans to choose from, but it is not as difficult as it looks.

Insurers must give full credit for all the time spent with another company, and if you’re switching to an equivalent plan you are covered immediately. There is no waiting period and you will not lose cover – unless you choose to downgrade.

Your new provider may only really ask you three questions: Who are you currently insured with? What plan are you on? And how long have you been on that plan? They cannot pry into your life by asking loads of questions, although you can ask as many as you like, and the more specific the better.

Goode suggests that people do not rely on websites to buy health insurance. Instead, he recommends contacting companies by phone. He gives two reasons for this. The first is that sometimes websites are not updated with all a provider’s policies. The second is that when you buy online you accept full responsibility for understanding every single detail of it. But if someone has to explain it to you over the phone, they have to assume responsibility for explaining key details.

“I would also encourage people to give details about their health and their requirements over the phone,” he says. “Health insurers can’t discriminate because of pre-existing conditions, but by disclosing everything it puts the onus on them to tell you whether or not you are covered for the things you need.”

“I would encourage people to block out an hour at some point before renewal. Sit down with a cup of coffee and get on the end of the phone. But never phone up and ask what the person on the other end recommends. Once you do that, you’ve lost.”

One question anyone keen on switching could start with is this: “Have you any plans across your entire range – including your corporate plans – that are equivalent to the plan I am on, and how much do they cost?” Follow up by asking what cover you lose by switching. The key thing is to put the onus on the insurer to explain everything.

Comparing policies

Once you have an idea of the names of the alternatives, the Health Insurance Authority website is the next stop. It has easily decipherable details of every plan on the market and a comparison tool that lets you see how your existing plan stacks up against other policies. While the HIA site is good, it is a regulatory authority and is forbidden from offering advice on providers.

One piece of advice is to shop around. Late last year the HIA launched an advertising campaign with the message “Before you renew, see what’s right for you” to encourage policy holders to at least look for information on plans and prices before they renew policies for 2017.

"Someone who hasn't reviewed their level of cover, and the price they are paying, in the last three years is unlikely to be getting the best value they can for the cover they need," said HIA chief executive Don Gallagher at the time the campaign was launched. "Switching health insurance product or provider is a very straightforward and easy process."

So just do it. You will be glad you did.