Posted by Jill Kerby on August 27 2014 @ 09:00
GLOHEALTH SHAKES UP MARKET WITH EVEN MORE FLEXIBLE PRICING
The soaring cost of private health insurance (PHI) since 2008 has resulted in over a quarter of a million people dropping their private cover and tens of thousands adjusting their cover downwards.
The biggest culprits are not just unemployment, emigration, the usual high medical cost inflation and tightening family budgets, but also government imposed costs: the raising of the risk equalisation levy – a subsidy for the state owned wholly VHI – to €399 per adult policy; the rise in the private bed in a public hospital charge from the €75 to €830 a night and finally, the loss of the 20% tax relief on premiums over €1,000.
Since it is mainly families and younger, healthy single people who have been dropping, or reducing their private insurance cover, the insurers have been targeting their needs first: they’ve all cut the cost of family plans by giving limited term child discounts or allowing younger children and babies to go free.
They’ve also reduced some benefits to cut costs, adjusted the plan benefits to suit the needs/wants of the individual customer (GloHealth have based their entire product line on this kind of flexibility) or have adjusted plans to include more excess payments.
Gone are the days when there were just a handful of plans from which to choose: there are now a few hundred and you need your wits about you to work out the right one (or different ones) for each member of the family.
Last week, the enterprising GloHealth company, gave the fractured health insurance market another good shake: it announced “Activate”, a range of unique new health insurance plans from September 1.
There are two cash only plans: Activate Cash and Activate More Cash (the latter is more expensive with high value cash payments). These plans make cash payments for a range of scans, tests and other diagnoses including consultant visits, access to a 24hr Nurse Line and for up to 10 nights of in-hospital stays.
The cost of these plan are €395 per adult, €197.50 for students (up to 22) and €161 per younger child for Activate Cash and €645, €322.50 and €187.63 respectively for the Activate More Cash Plan. Once you hold one of these plan you can upgrade (by paying the price difference) to an Activate Hospital plan (at €747 for an adult, €373.50 for a student and €281.37 for a child) for quicker access to a public hospital. The more expensive Activate More Hospital plan gives access to both public and private hospitals. It will cost holders of the Activate More Cash plan €1,267.75 for an adult, €633.88 for a student and 335.68 and again, you will have to make up the difference in price between the two plans.
This activation can happen within two weeks of a hospital admission, or even two weeks after an emergency admission if you wish. For people upgrading from the cash to hospital plans, who have pre-existing conditions, GloHealth will reduce the existing upgrade period to just two years.
The downside is that the range of Activate Cash payment categories is fairly limited – and are many co-payment and excess payments required, especially for the Activate More Hospital plans other than for public hospital stays.
The tradeoff is that if, like the majority of private health insurance members you rarely ever find yourself admitted to a hospital for an overnight stay, the Activate Cash payments – towards consultants fees, scans, A&E visits and any hospital overnights you might have (and these easily cover the mandatory €75 per night on public wards) – might be all that you ever need.
Health insurance adviser Dermot Goode (total.healthcover.ie) said last week that a pay-as-you-go option like this will appeal to many younger people on verge of cutting their health-care because aside from a much lower initial premium under the cash plans, it will give them that extra comfort of knowing that with the upgrade they can get hospital treatment quickly (and affordably) if the worst happened.
He also said he believed this is a “very good option” for parents whose older student children face adult premiums once they reach 22; at either €197.50 or €322.50 the cash plans (with the option to upgrade to hospital ones) are certainly a very tempting option (given how most young people are healthy) than expensive, conventional adult health insurance plans.
Will the other health insurers bring out their own versions of this new GloHealth cash/hospital upgrade combination? Perhaps.
But it will be also be interesting to see if GloHealth’s new offering ends up competing with the health cash plan provider, HSF.ie which has been promoting not just it’s own product, but their plans in conjunction with low cost PHI as a better value alternative to many stand-alone health insurance plans.
A good, specialist insurance adviser can help you get through all these choice options, explain how the tax deductions work (they don’t apply to cash-only plans) and help arrange the best value contract.
If you have a personal finance question for Jill, please email her at firstname.lastname@example.org or write to her c/o this paper.