Rise in insurance levy confirmed after scheme approved

A €65 increase in the health insurance levy from next month has been confirmed after the European Commission approved the funding scheme put forward by the Government.

The commission said yesterday it had approved under EU state aid rules the Government’s permanent risk-equalisation scheme for the period up to 2015.

The scheme will see a rise in the insurance levy for most subscribers from €285 to €350 in March, with the increase certain to be passed on to policyholders.

This money is collected in a central fund and shared among the State’s four insurers according to the age profile of their customers. The VHI, which has more older customers than its competitors, is the main beneficiary.

Welcoming the commission’s approval, Minister for Health James Reilly said the scheme would help to keep private health insurance affordable for older and less healthy people.The VHI also welcomed the announcement by the commission, despite telling the Central Bank last month that it was only “55 per cent effective”.