Don’t cancel your health insurance just yet

AN estimated 6,000 people a month are abandoning health insurance policies. Since the start of the recession, 123,000 people have terminated their cover, leaving 2.17 million people still in the market.
With the public health system already under-resourced and oversubscribed, it will struggle to cope with any increased influx of patients. This will result in longer waiting lists and poorer outcomes for patients.
Pulling out from private health insurance has huge implications for the public system. People who withdraw from having insurance fall on a very overstretched public healthcare system and, from a healthcare economic point of view, they transform themselves from being a welcome income generator to the health system to being a cost burden.
Having insurance is beneficial on many fronts but most particularly when it comes to accessing private and semi-private rooms in public hospitals and any stays in private hospitals.
Getting to a private hospital usually means avoiding queues and waiting lists. It also gives you access to more hospitals and more treatments. A patient needing medical treatment without health insurance is faced with the choice of going into the public system or funding private healthcare themselves. Significantly, and contrary to popular perception, unless you have a medical card, or are exempt for certain medical conditions, public healthcare is not cost free.
The cost of a bed in a public hospital can be anything from €75 per day, up to a maximum of €750. The cost of a semi-private bed can range from €220 to €890 per night, while a private bed in a public hospital can vary in cost from €260 to €1,017 per night. The cost of seeing a consultant can vary from €150 to €300, though even those with health insurance can be hit with consultant charges.
Operations for appendicitis or tonsillitis could cost around €5,000. A hip replacement could cost more than €16,000, while a pacemaker could cost over €30,000 and a heart bypass €40,000. A day procedure in a private hospital for something as simple as getting a mole removed could cost up to €1,000.
Patients in the public system, who are diagnosed with relatively minor conditions such as a blocked artery or a bad hip, can be left waiting months or longer to see a consultant and access treatment. However, if you are diagnosed with a serious, life-threatening condition you will be treated with priority.
Shop around. You have the right to switch health insurance provider without incurring penalty or having to reserve waiting periods. You also have the option of reducing the level of cover you have.
This idea of putting aside a few bob to cover a rainy day, rather than taking out insurance, just doesn’t work. Firstly, the money is often used on something else and secondly, your savings could be wiped out with one small minor admission. There are over 200 plans across three insurance companies, some of which offer great value. A basic health insurance plan can cost from as little as €495 per adult and there are often promotions on children’s plans, which will give 12-month cover free.
Avoid contacting insurance companies and telling them you cannot afford your current plan. You are better off phoning and advising them of your budget and what cover is important for you and your family, for example, telling them, ‘I have two adults, two children and €1,800 to spend. What can you give me?’ They will then have to identify a range of plans to fit your budget.
At some presentations on health insurance, between 60% and 70% of the people are on the wrong plans and don’t fully understand what their plans cover.
The Health Insurance Authority website, www.hia.ie, shows price and cover comparisons between various plans. Individuals also have the option of switching to often discounted corporate plans.
Families can save more than €1,000 per annum on their health insurance by tweaking their cover. VHI Healthcare recenlty announced that its prices are set to rise by up to 12.5%  next month, the third hike by the State-owned insurer in just over a year. This follows similar hikes by rivals, Aviva and Quinn.
Next month’s rises mean families on the VHI Parents and Kids plan will have to shell out an additional €280 for cover. Since January 2011, the cost for a family of two adults and two children has shot up by more than €600.
However, an analysis of the market has shown that families can escape the hikes by all three insurers. They can achieve this in various ways:
1. Cheaper corporate plans that offer similar benefits;
2. Availing of free children’s cover for 12 months;
3. Diversifying the plans, such as putting children on different plans to the adults;
4. Reduce cover to cheaper plans or
5. Switching providers.
An adult on the VHI Health Plus Extra plan (it used to be Plan B Options) is paying €1,461 a year. This is due to jump to €1,644 from March 1. Families (two adults and two children) on Aviva Health’s Level 2 Hospital Plan are paying €2,730. By opting for Level 2 Health Excess, which has a €125 excess for each private hospital admission, €885 can be saved.
However, Aviva’s corporate plan alternative, Business Plan Extra will cost the family €2,165 and for a saving of €565 there is a private hospital excess of €75.
For more information, contact Carey Corbett Financial Solutions on 065 6893540.