Jill Kerby

DON’T EVER OVERPAY FOR YOUR HEALTH INSURANCE 

This is the start of the busiest time for private health insurance renewals, for companies renewing their corporate schemes and for individuals.  

And that means you have a chance to save yourself, your family or your company, hundreds or even thousands of euros over the next year by reviewing and changing your existing policy. 

Last Wednesday, the specialist broker, Dermot Goode of TotalHealthCover.ie was making one of his regular appearances on The Pat Kenny Show and,as always provided example after example of keener prices on existing levels of cover.

Co-incidentally, the night before Dermot appeared I was giving a personal finance seminar to the Offaly Ladies Group that included powerpoint slides of popular and alternative health insurance plans that Mr Goode had provided. As expected, the Offaly ladies (who had been addressed by Dermot a year earlier) took out their phones and photographed the new, updated prices.

What was so reassuring was that even in this lovely, rural part of Co Offaly, the most important message of all was being taken on board -  that health insurance is not a luxury, but an essential part of personal protection insurance.

Let’s put this last statement in context. 

The State will spends well over €13 billion on public healthcare next year in a country with just 4.5 million people – about half of whom them under age 25 and are the least likely to need the service.  Yet it also continues to lose struggle to provide efficient, comprehensive, accessible health-care when it’s needed and not 12 or 18 months after you start feeling unwell or showing symptoms of a serious condition. 

And this is why nearly 2.2 million of us still voluntary pay €1,000 or more on top of the average c€3,500 in tax per working adult that we must pay to the State for the HSE. Anyone without a medical or GP card (but not necessarily private health insurance) also pays hundreds of millions more to other private medical practitioners like GPs, consultants, physiotherapists, psychologists, dieticians, speech therapists, etc.  

Unlike the monolithic, unaccountable HSE and Department of Health, if the professionals who work in the private health sector do not deliver the service they offer (and for which they are highly regulated by the State) or were continuously loss-making, they would answer to their shareholders and bankers (in the case of private hospitals) who would then withdraw their investments and call in their loans and shut them down. (This is what happened to Mt Carmel Hospital.)

The private health providers also know that their highly qualified staff would quit and go their competitors if they were exploited or their wages weren’t paid (unlike HSE staff who know that they will always get paid because taxpayers have no choice but to finance their wages and pensions). 

And most importantly of all, they know their customers – the patients they treat – would stop using their services and go to their competitors (or the Courts) if they were unhappy or dissatisfied. Unfortunately, once you are entirely at the mercy of the HSE – as a medical cardholder, for example – you don’t have that choice. Nor are you guaranteed to be treated as a valued customer/patient, except by those HSE staff who do their best to care for their patients as they would want to be cared for. 

I’m not trying to score political points here.  Instead I’m reinforcing the real message from that hugely informative half hour that Dermot Goode spent with Pat Kenny last Wednesday (21/10/15 click ‘podcast’ at www.newstalk.com): that the private health insurance industry is responding to customer demand for good cover at lower prices.  As Goode explained, the most competitive plans, with access to both public and private hospitals and which also pay c50% (or more) of outpatient costs are the ‘corporate’ ones that are often designed with a single large company in mind with hundreds or thousands of workers.  But because of our community rating system, anyone is entitled to buy such a plan, the catch being that the corporate plan won’t be advertised to the general public and you need to know the name of the plan you want when you contact the provider. 

For years – until it became too expensive – my husband, son and I were Laya ‘Health Manager’ plan holders. A superb, comprehensive plan, it now costs €3,780 per adult! On Dermot’s advice we kept switching to Laya’s corporate equivalent’s of this plan . This year we have switched to a near equivalent of Health Manager, though now with a €150 annual excess and a reduced annual outpatient refund. It is Simply Connect Plus …and it costs €1,099. 

Check your renewal date. Read the plan benefits carefully, especially if you have any pre-existing conditions. 

Take advice. Listen to the podcast. Save money…a lot of money. 

Do you have a personal finance question for Jill? Write to her c/o this newspaper or by email:  HYPERLINK "mailto:jill@jillkerby.ie" jill@jillkerby.ie

BUDGET 16 WINDFALL COULD BE AN INSURANCE LIFESAVER

What should you do with the tax refund or savings that you will be getting back in your pocket as a result of Budget 2016?   If you have dependents, this is a great opportunity to address not just expensive outstanding debts, but shortfalls in your insurance protection and pension contributions.

Last week’s Budget was a classic, pre-election “something for everyone” giveaway. But we live in the real world, not an imaginary one where politicians only do what is really best for the nation and not to get re-elected.

The reality this week is that everyone with an earned income or pension income is better off, mainly because of a claw-back of the hated Universal Social Charge rates, small increases in child benefit, the state pension and the cost of GP visits.

Meanwhile two important, though relatively smaller cohorts – low earners and the self-employed - will see their gross incomes rise to €9.15 an hour or €708 over a full year and €550 respectively as the minimum wage goes up and an earned tax credit is awarded for the first time. (The latter will gradually rise to the same €1,650 that PAYE workers receive.)

Families are big winners.

They will see their annual, tax-free child benefit payment for one child go from €1,620 to €1680; from €3,240 to €3,360 for two children; from €4,860 to €5,040; from €6,480 to €6,720, etc.

On top of their USC adjustment (worth €780 for a young family of four with an income of €57,500) and extra child benefit of €120, from next September this family can avail of another 15 hours per week of pre-school care that is worth €12.50 per child per day for five days a week for the nine month school year. This is worth approximately €2,000 plus a year per child. The extension of free GP cards for all children under age 12, assuming just four GP visits per child per year, would also be worth between €400 and €480 a year depending if the parent normally pays between €50-€60 per GP visit.

A family with two young children earning a modest €57,500 can expect an extra €900 a year, even before GP card savings.

Finally, pensioners are also big Budget winners, especially those aged over 70 who already enjoy a lower USC rate of 3.5% if their total pension income is less than €60,000 a year, will see that rate fall to 3%.

The contributory state pension increases by €156 a year to nearly €12,156 and the pensioner will get another €173 towards the restoration of their Christmas bonus (€327 for a couple).

An older person in receipt of the carer’s allowance will see their weekly payment also rise by €156 a year; the rolling out of the universal GP card to everyone aged 70 and over could be worth between €300 and €420 a year to them if they pay €50 or €60 per visit.

A couple aged over 70, with an income of €48,000 (including two state pensions), with one of them in receipt of a carer’s allowance, will benefit by as much as €1,640 when the higher pension (x 2) and carer’s payments, Christmas bonus, lower USC and free GP cards (x 2) are all added up.

The tax cuts and extra benefits mean that while the minimum wage earner will probably see much of their windfall disappear in extra rent payments (many still live with their parents), for families and older people the extra cash can fill some important spending gaps.

Surveys over the last year have shown that life insurance cover for adults with dependents is now below 47%.  Some, with mortgage difficulties have reportedly stopped paying mortgage protection insurance, and even worse, home or motor insurance.

Their first priority should be to activate lapsed policies and/or to take out straightforward term life insurance. Depending on the parents’ age, premiums could be as cheap as €10 month per €100,000 cover.  If income protection cover is not included as an employment benefit the parent should also consider taking out this policy. Premiums are also age and job related. Paying down expensive debt, like credit card balances and hire purchase loans is another prudent option.

Older people may want to spend some of their windfall on improving their winter heating allocation, repairing or upgrading inefficient boilers or heaters. They may also now be able afford private home assistance care where needed or even in upgrading private health insurance.

Budget 16 may not have directly addressed two of the biggest elephants in the room: the housing shortage and mortgage crisis but for tens of thousands it has provided some leeway to protect their dependents from disaster…and some extra comfort for older people. 

And that’s nothing to sneeze after seven years of take, take, take.

WHEN ‘PHISHING’ FOR MONEY TURNS INTO ‘VISHING’

You might be amazed to hear that the clever little ‘vishing’ fraud revealed recently by the Gardai actually succeeded in scamming amounts as high as €38,000 from the mainly elderly people who fell for it. Who would agree to transfer such huge sums over the phone, even if they did think they were speaking to a person at their bank or a senior Garda officer.

According to the newspaper reports, a sophisticated telephone gang of fraudsters have been targeting older, vulnerable victims – by telephone - with a tall tale.

The caller claims to be the head of security at a well known company or store – say, a well known utility company -  and because of some internal skulduggery, needs to confirm your bank details with you.   If you don’t have any account with them – either you or they will say the other is mistaken - and simply hang up.

But in some cases, there is an account with the company; however, in most cases, the elderly customer at the end of the phone is still unlikely to hand over these details to the stranger at the end of the line, even if does claim to be the so-called head of security. 

‘Fair enough’, replies the caller, assuring them they are doing the right thing.  ‘Give your bank or even your local Garda station a ring to confirm that we are undertaking this investigation, that you are on our list, etc…’.

Doing just that the victim, by this stage, calls their bank or Garda station and is put through to that officials dealing with the store or utility company (for example) and confirms that an investigation is underway. The customer confirms their bank details, and is then instructed to transfer a certain amount of money in their account (or even all of it) to a new account to defend it against this fraud attempt.

What the victim doesn’t know is that when they put down the phone after the first conversation, the ‘vishers’ were still on the line and diverted the call the victim thought they were making; they were actually still on the original line and now someone impersonating their bank official or the Gardai was on the line and instructing them to approve the money transfer.

‘Vishing’- telephone bank account fraud is targetted at older people because they don’t use computers to the same degree as younger ones, who regularly get emails from their bank (and every other one) telling them to confirm their details by ‘clicking here’. This kind of ‘phishing’ has been widely publicised, as have the silly solicitations from so-called crooked ex-oil officials in Nigeria who will share the millions they’ve skimmed from the Department of Energy in Lagos if you would only just supply them with all your bank account details and passwords.

This new scam sounds more plausible, but is just another variation on the guy with the ID tag around his neck who says he’s from the electricity or gas company and needs to check for leaks.  Instead he checks to see where your purse is, or your jewellery or silver and while you’re off getting them a nice cup of tea, is filling his jacket pocket with your cash and valuables.

The message is the same of course – don’t let anyone in your home without an appointment. Get a good chain on your door (or install a glass panelled porch door) so you can speak to callers, but they can’t push their way in. 

Never ever reveal your bank details to anyone over the internet (unless it’s a secure retail site) or over the phone to someone you do not know personally, like your bank manager. If you need or want to transfer money go to the bank and do it in person. (Again the exception is if you do your banking on-line, via secure apps.)

Crude as vishing and phishing scams are, organisations like Age Action Ireland warn that too many older people lose large sums of money and become victims of ‘elder abuse’ by handing it over to unscrupulous family members and carers.

The worst abuses happened during the Celtic Tiger years when older people with large sums on deposit in their banks were encouraged to invest in high risk stocks and shares or investment funds, despite the fact they had little or no time to make up losses in the event that the markets experienced a correction or crash. 

That was exactly what happened of course in 2008.  How to protect yourself against this kind of ostensibly legitimate targeting of your money is a story I’ll return to in a future column.

Correction:  Last week I mentioned that November 13 is the on-line (at www.ros.ie) Pay & File self assessment tax deadline. The deadline is October 12.

Do you have a personal finance question for Jill:? Write to her c/o this newspaper or by email: jill@jillkerby.ie