As prices hit the roof the young and healthy give up their health insurance cover.
The Government’s increase in the health insurance levy is due to start at the end March and could mean further cancellations in health cover for those aged between 25 and 34.
Dermot Goode, Cornmarket’s General Manager of Health Insurance has said rates have gone up by 20 per cent in the past year and on the premium policies by even more.
“We are seeing a continuing exodus of young people from the market, so much so that it is threatening the sustainability of this community-rated market,” he told the Sunday Independent.
“Some people will say that is only a small percentage of the overall market but that’s not the point. The problem is that it is all the young people, aged 25 to 34,” said Mr Goode.
“It’s forcing young, healthy people out of the market for two reasons. Firstly, they don’t think its good value anymore. They have never been on a waiting list, never been to hospital and so don’t see the very great value of health insurance. It’s low on their list of priorities.
“The second reason is that they simply don’t have the money to pay for it. What is also happening is that mum and dad are taking the young people off the family policy.”
“The first quarter of each year is the peak time for renewals. About 850,000 of the 2.1 million policyholders renew in the first three months of each year,” Mr Goode said.
“I think we will see exactly the same this year. Already the insurance companies are telling me they have seen a marked increase in the rate of cancellations. It is down to affordability, and emigration.
“We have never experienced the volume of calls of people trying to find the best value. People who would normally just renew their cover are not doing so because they just haven’t got the money.”
James Reilly, the Minister for Health is increasing the health insurance levy by 23 to 24 per cent from the 31st March this year.
“That will also no doubt be passed on. It will make a bad situation worse. People think that having two million people insured is fantastic. It is not,” said Mr Goode.
“With young people leaving, it means the average claims cost from those that are left will go up.”
At present there is a temporary levy of €285 on every policy. These funds have been redistributed to the VHI as an offset for them having a lot more older clients.
The levy will now be increased to €350 and will apply to all adult policies.
This amount is more than half the cost of the typical basic plan which at present ranges from €504 to €613 for an adult.