Jill Kerby

PRIVATE A&E vs HSE?   IT’S NO CONTEST IN MY HOUSE

Is it worth buying health insurance for your children?  I’ve always thought so, even if for the last 21 years I’ve made only a few outpatient couple claims on behalf of my son, and all for outpatient/minor accident and emergency events.

I am still hugely grateful to the A & E in Our Lady’s Hospital in Crumlin where he was rushed a couple of times as a little boy. It was never for anything life threatening and treatment was always pretty quick. We’ve always the portion of the c€3,500 that my husband and I each contribute to the HSE each year as part of our income tax (and every other taxpayer contributes) is the fuel that keeps great hospitals like Crumlin open.

Best of all, any child with a life-threatening injury or condition (like cancer, heart and respiratory conditions that could kill them) is treated right away and the public/private healthcare apartheid regarding accommodation barely at all (most children are kept in wards, not private or semi-private rooms.)

But the €13.4 billion annual HSE budget, despite recently introducing GP cards for children under age six, still doesn’t stretch to treating all sick children quickly, let alone comprehensively for their (immediately) non-life threatening conditions.

There are still over 400,000 people waiting to see a consultant, tens of thousands of them children. Treatment and surgery waiting times can be as long as 18 months, though the target by the end of this year, is no more than 15 months.

Both the numbers of people waiting and the time, is finally reducing and one of the reasons this is happening is for these people to be treated privately, here in Ireland and abroad via the National Treatment Purchase Fund, which appears to have been geared back up, after funding was reduced as a result of the 2008 economic downturn. 

For example, children with scoliosis (curvature of the spine), many whose conditions were deteriorating because of long waiting times in the public service, are now being sent abroad for private treatment via the NTPF.

Which brings me back to health insurance for children.  If a child’s condition is not life-threatening and they don’t have private health insurance, they join a queue. The lengths vary depending, it mainly seems on how lucky they are in having a GP with some pulling power, how many consultants there are specialising in that particular condition, and how long their waiting lists but also whether there are sufficient beds, nurses, operating theatres, etc.

It doesn’t seem to matter much whether it’s a relatively minor problem like tonsillitis or ear grommets, asthma or more serious ones like epilepsy, cerebal palsy, spina bifida, or heart/lung conditions.  The former two can be kept at bay with antibiotics – but the others may need advanced hospital treatments or surgery.

‘The Child’ is now 21 and a young man.  He has a few scars for the childhood sports-related wounds that, in the end, didn’t need stitches (just glue!) and the couple of suspected broken bones that turned out to be bad sprains.

Last week, however, he had to be rushed to an emergency department with a suspected (and in the end ‘necrotised’) appendix. He was in agony, but he walked in under his own steam…to the A&E at the Beacon Hospital.

Despite being busy for a Tuesday afternoon, he was seen within minutes by nurses, doctors, the A&E consultant and the surgeon who stabilised him, and was in the operating theatre within a couple of hours. His care was superb.

St James’ Hospital is just down the road from my house. I know the staff are just as dedicated and skilled as those at the Beacon.But they’re understaffed, overworked and depending on the hour and day, the A&E itself varies from being just a little crowded and chaotic, to a full-blown madhouse where walk-ins (like my son) can wait hours for treatment.   

Jack’s Laya Healthcare (student) policy, Simply Health Plus, costs just €529 or €10 a week. The same policy for his dad and me costs us each €21 a week. It carries just a single, annual hospital excess payment of €150.

The Beacon, like the Blackrock is a high tech hospital. It has over 800 staff and over 200 consultants. It is calm, clean and remarkably quiet (which is much appreciated by everyone.) Rooms are spacious (singles only at the Blackrock) and the meals are healthy, tasty and serviced hot.)

I wrote once (in my Sunday Times column) when Jack was little, that I would sell my car and never take another holiday again before I would do without private health insurance. Last Easter, my husband had his first medical emergency ever and spent nearly a week at the Blackrock after first waiting nearly four hours to be seen at St James’ on a Saturday afternoon as he got sicker and sicker.  Last week, it was Jack’s turn.

Our two-tier health service is far from ideal. Those who can pay the insurance are treated quickly and suffer less. But 2.1 million people are so concerned about the disparity in service that they’re willing to collectively pay over €2 billion more to ensure they and their loved ones are treated in a timely, efficient way. 

Would that happen if private medicine was abolished and the HSE got that extra €2 billion on top of the €13.4 billion? 

Not on your life. Or mine. 

If you have a personal finance question for Jill, please email her at jill@jillkerby.ie or write to her c/o this paper.

PARENTS SOMETIMES GET THEIR PRIORITIES WRONG

The headline that caught my attention in a press release from Laya Life last week (this is the life assurance arm of Laya Healthcare) was the one that read, “Parents expect their children to be financially independent from the age of 24.”

This is the age when my own child will finish his college course (he spent a year in Canada after his Leaving Cert) and his father and I are already beginning to have doubts about whether he’ll be out on his own by then. 

We’re hoping that the primary science degree he’s working towards will open the right doors and help him a job and decent income so he can move out and start a life of his own.

“But won’t he have to do a Master’s degree?” people ask. “Or a PhD?”  I hope not. But I’m guessing that graduate school probably means another large outlay of (our) money if he doesn’t win a scholarship, gets offered a fellowship (or whatever they’re called), marries an heiress or wins the Lotto.

Laya Life commissioned this research from economists Joseph Durkan and Moore McDowell of 1,000 parents to find out about how much it costs to raise a child from cradle to third level education.

They estimate it’s about €105,000 over the space of about 21 years with the average spend per household of children being about €11,000 a year, including food and clothing, sports and entertainment and holidays to the higher costs of childcare, education and even rent support (to age 24).

The majority of parents said they were “just about keeping their heads above water” but nearly 60% admitted they don’t have enough money to put aside for savings. The later teenage years, they said, are the most expensive with monthly household child costs peaking at €1,068.

That 77% of Irish parents admit they put too much pressure on themselves “to give their kids everything” won’t come as a surprise to guilt laden Mums and Dads who work long hours pay their taxes, debts and bills with incomes that may not have budged for seven or eight years and in many cases have even been reduced or levied.

Almost half (45%) of the parents said that they’ve even been forced to cancel insurance contracts in an attempt to cut back on costs. More than one in four said they’ve cancelled their pension for the same reason, while 48% have put off saving for their retirement in order to have more money to spend on their kids.Only 29% said they had a savings plan in place to cover future costs.

Perhaps the most worrying response was that 42% of the parents said they had no life insurance in place, a stubbornly high, but consistent statistic.

Whatever about having no savings – the risk is that you’ll keep falling into degrees of debt if an appliance needs replacing, or more seriously, you lose your job, even temporarily.

But not having any life insurance means your family could end up impoverished and may even lose their home if a parent-cum-breadwinner dies prematurely. 

It struck me that this interesting piece of research is a little microcosm of Irish family life - of parental love and guilt; of our high cost consumer society and our children’s’ expectations…and our skewed priorities. 

Life insurance isn’t a luxury; buying your children nearly €600 worth of gadgets, games and other electronics in a year. Spending  €455 on hobbies and toys or €900 on extra curricular classes and grinds is.

Neglecting their financial protection – and I refer to the under 18s -  in order to meet a €4,000 euro bills to send one older child to college is also a false economy if a parent dies without any life insurance.

Life insurance has to be one of the best value insurance contracts any parent can buy, even if it is the one that you absolutely never want to have collected during their childhood.

I may complain today about the high cost of supporting my Viking man-child (he’s tall, blonde, red-bearded!) and if needs would find a way to pay his own fees if we insisted. But we never skinted on life insurance or other protection policies when he was a young child (and our mortgage and other bills were very large.)

Laya sells €150,000 worth of life cover for 20 years for about a tenner a month (depending on your age). 

Buy some. Be a really loving parent. You also deserve the peace of mind.

If you have a personal finance question for Jill, please email her at jill@jillkerby.ie or write to her c/o this paper.

HOLIDAYS FROM HEAVEN…THE FREE ACCOMODATION WAY

If and when the Greek situation (a 19th century term as much as one of our own century) ever gets sorted out, the assumption is that tourism will enjoy a huge bounce.

If it leaves the euro prices will plummet and global bookings will soar:  the only good thing to emerge so far from this terrible crisis is that pictures of Greece’s incredibly beautiful islands, golden beaches, crystal clear blue skies and seas have been beamed around the world.  If I was a Chinese tourist (and they now number in their tens of millions) I’d want to add Greece to my European itinerary.

If Greece stays in euro, those holidays will be more expensive but still a lot cheaper than going to France or Italy.  And the Greeks are certainly going to enjoy the ‘solidarity’ effect from the Irish, who know first hand how most of the bail-out money they borrowed from the Troika and will be paying off for the next 40 years has gone to Troika creditors, not to help them get out of their economic black hole.

Every time I write about personal finance issues like the importance of saving, investing or starting a pension, quite a few people remind me that so many simply do not have the spare income for any of these things.

Last week on my RTE Drivetime slot I talked about how to reduce the cost of holidays by considering doing house swops (more on that below)…and the inevitable e-mails and tweets arrived. “Nice for some, but I only have €7 a week left over. No holidays for me”, one tweeter wrote.

Being unemployed, stuck with huge mortgage payments or arrears, saddled with heavy child-care costs will certainly leave you in that condition. Unemployment is still around 10%. 

But sometimes people who say they can’t afford to save, invest in a tax-deductible pension, or even take a much needed summer holiday haven’t really examined the possibilities of earning more, paying less tax, spending not just less, but more conscientiously. 

A survey by the Competition and Consumer Authority last year showed that only 1 in 4 consumer bother to shop around for insurance, utilities, mobile phones, three substantial drains on our budgets.  Yet those who reported that they do compare prices every time their car insurance or electricity contract come up for renewal, they save on average, between 12% -17% of the cost of their previous annual bill.

Saving 15% off annual household mobile bills of say, €700, broadband/TV/internet of €900, motor insurance of €500, an annual energy bill of €1,200, house insurance of €400 will mean an extra €550 in your pocket. Claim all your annual medical and dental expenses back from the Revenue – say €500 for a family (@20%)  – and you can squeeze out another €100.

If you haven’t claimed this refund in the previous 4 years (and the vast majority of us do not) that’s another €400 you can expect back. Your savings are now over €1,050, enough perhaps to buy some cheap Ryanair tickets to somewhere in Spain, Portugal or Greece where you’ve arranged a house swop for two weeks with a family that would like to spend their summer holiday in Ireland.

Formal, agency-assisted house swops have been going on for over 60 years and there are now loads of companies listed.  I’ve finally gotten around to joining two – the best knownwww.HomeExchange.com and a newer arrival, www.lovehomeswop.com.  Annual membership fees are a flat €130 or from €168-€288 respectively. Lovehomeswop.com offers a wider range of services for their customers but they both list huge numbers of properties and give lots of direction and help in trying to match you up with other swoppers for the dates you’d like to travel. (Lots of members even do weekend swops.)

The typical savings can amount to 60% of the cost of a conventional holiday the industry reports and even more if you both agree to swop cars too.  Your main expenses, after flights/ferries, etc are living expenses and entertainment, the former of which you’d be forking out for anyway back home.

A house swop is just one unconventional way to save money and to make a static or shrinking income go further. So is not settling for the same price tariffs for gas, electricity, petrol (diesel is c18% cheaper), the same high insurance premiums. But it means not giving in to inertia. Ditto for forensically reviewing your taxes and other deductions. My colleague Sandra Gannon at TAB Taxation Services (we produce the TAB Guide to Money Pensions & Tax every year) reports that 50% of all new clients are overpaying the Revenue Commissioners.

And if you have spare rooms in your house and want to earn up to €12,000 a year entirely income tax-free, sign up for the Rent-a-Room Scheme (see www.revenue.ie) .

That’ll buy a few holidays every year.

If you have a personal finance question for Jill, please email her at jill@jillkerby.ie or write to her c/o this paper.