Insurers look to halt fall-off

THE PRIVATE health insurance industry yesterday said it wanted to be able to offer cheaper premiums to those who live healthier lifestyles, while also rewarding people for taking out health insurance at earlier stages in their lives.

Representatives of the main insurers told the Oireachtas health committee such moves could halt the large numbers of young people in the 18-29 years age group who were leaving private healthcare.

The committee heard some 175,000 people, many under 30, had left private healthcare in the past three years, a factor that drives up the cost of providing insurance for older people.

The industry also complained that it was not represented on a key Government working group driving the introduction of universal healthcare, a Government policy that would see people paying for mandatory health insurance as a percentage of their earnings.

Donal Clancy, managing director of Laya Healthcare, said the current situation was a “spiral” because, as more people leave private insurance, the more the proportion of costs to income goes up, and so premiums increase. One method of reducing premium costs, he said, would be to exempt children from the Government’s health levy, which was €95 per year for each child.

Interim managing director of Aviva Healthcare Alison Burns warned that unless the industry did something different, it “is going to terminally decline”. She said the insurers “can get younger people in; we just need to be able to do that”.

But she said under plans for universal health insurance, offering discounts to such groups as non-smokers could in future land insurers in jail. “Make no mistake, this [Universal Health Insurance] Bill is going to exacerbate the difficulty”.

“If you want to solve it today, lifetime community rating would solve it,” she said.

Lifetime community rating rewards those who take out premiums earlier in life with cheaper premiums as they get older.

However, Fianna Fáil TD Billy Kelleher said a consumer would have “to be mad” to take out private health insurance, “if you are a young person and there is going to be universal healthcare in a few years”.

Jim Dowdall of Glo Health told the committee VHI Healthcare was setting the price for drugs because of its dominant position in the market, while David Muiry of Swiss Rea said the ability of insurers to negotiate prices with service providers should not be lost in the new healthcare Bill.