Money Times - August 3

Posted by Jill Kerby on August 03 2011 @ 09:00





With €700 million cuts on the cards for the health service in the coming year, an additional 350,000 people joining the public health care rolls – these were the extra people latest census unexpectedly discovered – and health insurance inflation running at over 20% per annum, it’s going to take some manoeuvering for the average family or individual to get a proper healthcare plan in place.  


However, it has to be done.


Healthcare is the second personal finance pillar that I think we all need to prioritise in the coming years, whether you are part of a family, are an older couple who no longer have children to care for, or just a individual no longer in the first flush of youth.



That healthcare is going to get more expensive should be a given:  the government cannot afford to provide the same level of services, however inadequate you may already believe they are and there are clear signs that there are not enough consultants available to treat you in the public hospital sector.


Meanwhile, the private health insurance companies say they must adjust their premiums in line with the increases being imposed by the government for access to public hospital facilities, by the private hospital operators and as a result of the health insurance levy, the subsidy for the publicly owned VHI which all private health insurance members must now pay and which adds a whopping €542 onto the insurance bill of every family of two parents and two children. (It amounts to €185 for an individual adult and €55 for a child member.)



Last week, Aviva Health announced a 9.5% increase in the cost of their most popular plan, Level 2 Hospital after a 14% hike already announced last March.  VHI members with its most popular plan B, have seen their premiums increase by 45% while Quinn Healthcare’s plans are up just 6% since last September but more increases are certainly on the way in the autumn as well.


Cost control is a huge issue in a market where the incomes are falling – both for the state that runs the public health service and for individuals who opt to also have private insurance cover.


The Minister for Health, Dr O’Reilly said last week that he is not at all happy with cost control at his own insurer – the VHI – or in the management of the public hospitals, also in the sole ownership of the Department of Health.


Health care consultants, who advise private companies on their health insurance purchases, tell me that much more also needs to be done by all parties to control medical cost inflation. “Everyone needs to downscale their expectations and delivery of the latest, the most advanced, the best drug treatments and surgery.  There is no end to the innovation and cost, but the sources to pay for it are finite,” he said. 


So what should you do to ensure that you maximise your healthcare euro in a climate where public services are going to be increasingly restricted due to the economic downturn, and where the cost of private insurance looks set to keep going up until their costs are better controlled or reduced?


1)    If you have a private health plan, get it reviewed by a good broker or do it yourself using the Health Insurance Authority comparison site at www.hia.ie


2)    Consider switching to a cheaper provider and check out the usually cheaper ‘corporate’ version of your plan. Downgrading your plan will cut the cost, but there may be a waiting period if you want to upgrade again some day.



3)    Aviva and Quinn still allow you to cancel your existing plan and renew before the next price increase in order to lock in at lower 2011 prices. The VHI no longer allows this and will not reimburse unused premium payments if you switch before the end of your contract to a new provider.


4)    Don’t automatically include your children on a higher plan. They are the family members least likely to need expensive accommodation in hospital. A basic, lower cost plan will still allow them to avoid long treatment delays. the single, main reason for having the private cover.


5)    If you must downgrade or cancel your plan, consider a health cash plan from the likes of HSF instead. They charge single premium for the entire family, and tax-free cash payments for a wide range of treatments and hospital stays.  See www.hsf.ie for details.


6)    If you don’t have health insurance, start a health contingency fund – money you set aside every week for medical emergencies. It won’t be enough to pay for an operation privately, but it should pay for the specialist so you know what is wrong. You will then, hopefully, be able to get faster treatment in the public sector.


7)    Stop smoking. Drink less. Lose weight. Exercise more. Stop speeding.  Much of our chronic ill health, injuries and the bulk of the cost of healthcare in this country is down to the bad things we do to ourselves.  This economic downturn could last for many years, with a huge restructuring of state expenditure and less, not more access to free or low cost public services.


8)    If you can, make sure vulnerable members of the family – pensioners on low incomes, unemployed members with an ill child struggling to keep paying the premiums are helped out during this great recession.  Helping to pay for your elderly aunt or your sister’s children’s private health membership can be the best Christmas or birthday presents ever.



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