It hasn’t been a good week for people with health insurance as both Laya Healthcare and Irish Life Health rolled out price hikes with many families likely to poorer by around €200 a year as a result.
And while the State’s largest provider, VHI Healthcare, has kept its powder dry as we head into the autumn, history tells us that where one company goes others inevitably follow and a VHI increase seems all but inevitable before the darkness of winter closes in.
First out of the blocks this time round was Laya Healthcare which last week rolled out price increases averaging 4.5 per cent. This week it was the turn of Irish Life Health which imposed an increase, amounting to an average of 3 per cent.
Both increases kick in on October 1st although individual customers will not be hit with the hike until their renewal date.
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The companies all blame a growing number of claims and the high cost of medical care which is wildly out of whack with the general rate of inflation and while there is no doubting the veracity of such claims it is the consumer who is left to pick up the tab.
Addressing the price increases of late, the Health Insurance Authority (HIA) accepted that they would be “unwelcome, particularly during a time of rising living costs”.
It pointed out that insurers are “free to set their prices based on commercial factors such as medical inflation and claims costs” but said “affordability must remain a priority”.
Affordability – or the lack of it – does appear to be having an impact, the HIA noted earlier this summer.
In a market report published in June, it noted that cost of private health insurance had jumped sharply with a spike in prices, causing – at least in part – a significant slowdown in the numbers taking out cover in the first three months of the year.
It said a total of 2.52 million people in Ireland had private health insurance at the end of March, with the average cost of a plan standing at €1,929, an increase of almost €200 compared with the average price the HIA recorded in 2024.
The report said just 7,318 people entered the market in the first quarter of 2025 compared with 13,633 in the last three months of last year.
A real fear is if prices continue to climb, private health insurance will become unaffordable for many, particularly for younger people.
These are the people who are typically in better health and make fewer claims, so they effectively subsidise the cost of healthcare for older people who are more likely to need it.
If younger people drop out of the health insurance system because prices climb too high, they are likely to put more pressure on the public system while driving up costs for insurers who will inevitably pass it on to their customers creating a vicious circle of price increases.
“Unfortunately for consumers, the trend of regular price hikes throughout the year is set to continue similar to what we experienced in 2023 and 2024,” said Dermot Goode of totalhealthcover.ie this week.
“Further price hikes are expected as all insurers prepare for the peak renewal period from October onwards when over half the market renews their cover.”
Mr Goode noted that “as with each increase in health insurance premium, members need to be wary of the average figures quoted. In some cases, the actual increase could be much higher depending on the plan held. Members also need to bear in mind that the cumulative impact of all the increases since the last renewal will well exceed the 3 per cent figure quoted for the latest price hike.”
Mr Goode called on consumers to not “just accept these increases” and he cautioned against allowing cover to auto-renew. “All members should contact their health insurer well before their renewal and challenge them to source similar cover at a lower premium. Don’t be afraid to disclose your budget for the coming year and have them fully explain the benefit differentials of any alternative plan you may be considering.”
His view was echoed by the HIA which noted that consumers are “free to move to any plan on the market at their renewal date, and we encourage everyone with health insurance to review their policy each year to make sure that they are on the right plan for their current lifestyle and health needs.”
Shop around
Mr Goode said there were numerous tactics available to consumers to help them avoid these premium increases whilst still maintaining excellent cover. This is especially relevant for those members on the same plan for five years or more or those paying more than €2,000 per adult.
Shopping around can be confusing not least because there are so many plans to choose from with more than 300 plans on the market.
That leaves consumers at risk of feeling “overwhelmed” by the number of options available – a word used by the HIA in an assessment of the market last year.
It noted that the complexity works against people’s best interests and sees many paying over the odds for cover.
Despite the fact that consumers who shop around can make savings amounting to hundreds of euro each year – around 70 per cent of the market have never switched provider, while half of those who have switched have only done so once.
There is a misconception out there that it is difficult to switch and while it is certainly harder to change health insurer than it is to change energy provider – or at least there are many more variables to consider – it is not as hard as people might think.
There are strict rules in place protecting consumers protection irrespective of their age or their health issues.
Someone with a long-standing policy with one company will have served all the waiting periods so can switch to another company and get all the existing cover they had immediately.
If the plan on the table from the new company offers enhanced cover, switchers will most likely have to wait for that to kick in, but whatever they had already they keep.
People cannot be penalised financially because of a pre-existing condition or their age and the law requires health insurance companies to treat everyone equally.
The first step for anyone looking to find a better value policy is to check in with the company they are currently with.
Call them to see if they have a lower-cost equivalent plan to the one you are currently on. Make it clear you’re happy to take on some excesses or minor reductions in cover, depending on the savings and your state of health.
Your existing insurer has a complete record of all previous claims you have made and the simplest question to ask is if any new and cheaper plans would have covered all the claims that have been paid out over the last two years and to the same level. If the answer is yes, then your choice is pretty simple. You switch.
When talking to other companies, it is important to be upfront and to always remember you will not be penalised – financially or otherwise – for honesty.
Detail all the important elements of your existing policy, and outline any underlying conditions and procedures carried out. Have them confirm that any new and cheaper plan will cover everything you have had covered in the past.
Providers like it when we shop online, but by doing so we become responsible for all the decisions, be they good or bad. By talking to a company representative and asking the right questions, and insisting on having everything explained to you puts the onus on them to make everything clear. Do not be afraid to ask questions and make sure everything is clear in your mind before making any final decision.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
