46% of population covered by private health insurance as market grows

The private health insurance market is continuing to recover following the economic crash, with 30,000 more people having cover for in-patient care last year than in 2015, the regulator for the sector has said.

Speaking on the launch of its annual report, the chief executive of the Health Insurance Authority, Don Gallagher, said the market had now experienced two straight years of growth in the numbers of people insured.

He said almost 46 per cent of the population, or 2.15 million people, now have private health insurance. Subscribers paid €2.53 billion in premium payments last year.

Mr Gallagher said in the aftermath of the crash the numbers covered by private health insurance fell to a low of 2.025 million in December 2014 but since then the number of people insured had increased by 127,000.

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“The increase has been proportionally greater among younger age groups, with a net increase [over the past two years] of 85,000 in the number insured in the below-50 age category and a 62,000 net increase in the above-50 age category.”

Mr Gallagher said average premiums per person rose marginally by 0.3 per cent in 2016 to €1,177 per person.

“Premiums for specific products varied more widely but the effects of consumer activity such as switching products mitigated individual product increases.”

Chairwoman of the Health Insurance Authority Sheelagh Malin wrote in the report said the regulator recognised that the private health insurance market could be difficult for consumers to navigate due to the number of product variants available and the rate at which products or their prices are updated.

She said the authority had reviewed more than 1,150 samples of new or revised contracts during the year, while the number of products available increased from 360 to 373.

The authority said its online product comparison tool provided assistance to consumers in comparing the pricing and features for all health insurance products available on the market.

“The authority continues to advise consumers to periodically check (at least every two to three years) their health insurance for pricing and features to ensure they are receiving value for money. Consumers can switch providers of health insurance without any penalty under our community-rated private health insurance market.”

Minimum benefits review

The Health Insurance Authority also indicated in the report that it supported a review of the minimum benefit regulations applying in the market.

Ms Malin said: “The minimum-benefits regulations are intended to provide an underpin to the market in that they specify the minimum benefit level that each product must provide. These minimum-benefit levels have remained unaltered since the market was first opened to competition 20 years ago. The authority believes that a review of the regulations could reduce the range of techniques through which insurers seek to segment consumers and differentiate product prices by life stage.”

“This segmentation can undermine the principle of community rating for the market as a whole, albeit insurers must apply a single premium rate for each product, regardless of the age, gender or health status of the insured.”

Mr Gallagher said restraining the growth in insurance claims was critical to the sustainability of the voluntary health insurance market.

“Average claims paid per insured person increased by 1 per cent in 2016 following a 6.5 per cent increase in 2015 and a 3 per cent increase in 2014. These changes were probably higher because of the change in the rules for charging private patients in public hospitals in January 2014. However, the rate of increase is still lower than the 12.6 per cent average annual increase between 2008 and 2012. During 2014 and 2015, both overall consumer price inflation and health sector inflation were close to zero.”

The Health Insurance Authority said VHI Healthcare had the largest overall share of the market at 52% – although it had 81 per cent of the insured population over 80 years of age. It said Irish Life Health (including GloHealth) had 21 per cent of the overall market and Laya Healthcare 27 per cent.