- Posted by irishhealthinsurance
- On February 22, 2013
Friday, February 22nd, 2013. Laya healthcare today announced plans to increase premiums across a number of its schemes with effect from April 1st. The increase average is 10.8% and this is necessary due to a number of cost factors in the market, many of which are being driven by current Government policy.
– Government policy continues to drive prices upwards
– Government levy will cost laya healthcare c.€60m in 2013 – €14m more than in 2012
– Medical inflation continues to rise
– No increases to popular Health Smart or Health Smart Family schemes
– Price reduction on Essential Plus schemes from April 1st
Dónal Clancy, Managing Director said: “We are very conscious of the impact this increase may have on our members. Unfortunately, there are a number of cost variables in the market which are outside of our control. These are primarily the increases to the Government health levy, which VHI continues to benefit from, and the rising cost of providing medical treatments for our customers. In order to try and balance these rising costs and for the benefit of our customers and their families, we are protecting some of our most popular schemes. From April 1st there will be a price reduction on our Essential Plus schemes and we are also freezing the price of our Health Smart and Health Smart Family schemes which both have a 50% off kids offer to the end of February”.
The cost factors influencing the increase include:
– Increase in the Government health levy from €285 to €350 per adult, and from €95 to €120 per child from March 31st. Since its introduction as an interim solution to risk equalisation in 2009, the health levy has risen by 119% per adult and 126% per child.
– The impact of the levy on laya healthcare’s business. It will cost the company a staggering c.€60m in 2013 alone, €14m more than in 2012, with VHI continuing to be the chief beneficiary.
– The rising cost of providing advanced medical treatments for customers, particularly in the high demand areas of oncology, orthopaedics and cardiac care. In spite of significant work to increase efficiencies and to reduce rates paid across a range of procedures, the cost of claims continues to rise year-on-year.
The rising cost of providing advanced medical treatments for customers continues to fuel a rise in the rate of medical inflation.
- Laya healthcare’s spend on claims relating to cardiac treatment for 2012 was up 26% on spend for 2011. For example, claims covered in relation to a cardiac procedure to destroy arterial blockages to the heart and which can serve to avoid future heart disease and cardiac complications were up 56% on 2011.
- Laya healthcare’s spend on claims relating to orthopaedic treatment for 2012 was up 14% on spend for 2011. While our competitors impose shortfalls, laya healthcare is the only health insurance provider to cover 100% of eligible orthopaedic claims.
- The number of members who have claimed for high cost drugs increased in 2012 by 19% on 2011 figures, while overall the laya healthcare spend on these drugs for 2012 was 35% higher than for 2011.
- Outpatient claims are up almost 12% for 2012 when compared to 2011 figures. This is due to an increase in the number of laya healthcare members attending diagnostic scans and claiming for GP and other specialist medical visits (such as physiotherapy sessions). This is a really positive trend for laya healthcare members who benefit from the early detection of medical problems.
Mr. Clancy continued: “As I referenced at yesterday’s Oireachtas Health Committee meeting, the reality is that Irelandis facing a healthcare crisis. We are operating in a fundamentally unstable market which needs radical reform in order to stem the tide of rising costs. Our experience shows that the solution will need to be industry-led and benefit consumers equitably, providing a standard healthcare product, with a core set of benefits, for all. Then, on top of the standard healthcare product, consumers should have the opportunity to pay for optional extras, if they so wish. Right now thousands of young, healthy people are being forced out of the private health insurance market due to escalating costs and we urgently need to find a workable solution to put a stop to this. I would also like to see the Government taking a proactive role in incentivising younger people to stay in the market. The introduction of lifetime community rating, which would mean that the younger you enter the private health insurance market, the more affordable it is, would serve as a compelling financial incentive for younger people to enter the market, and stay in it”.