- Posted by irishhealthinsurance
- On January 22, 2012
by Susan Mitchell Sunday Business Post
A second price increase is imminent for policy-holders with Quinn Healthcare. Donal Clancy, managing director of Quinn Healthcare, told The Sunday Business Post that the government’s decision to increase the levy on private health insurance would cost the firm – which is the country’s second-largest health insurer – €20 million a year.
He said a health levy hike of 40 per cent, which was announced earlier this month, was not envisaged when Quinn Healthcare decided to increase premiums by 12 per cent at the start of 2012. Clancy said the company now had “no option” but to introduce a second price increase.
“We just can’t absorb that levy increase, but we do want to keep it [the increase] as low as possible,” he said.
Clancy declined to outline the average price increase, as he said the company had yet to finalise details with its underwriter, Swiss Re.
Separately, the Department of Health has written to health insurers to inform them that a new risk equalisation scheme will be introduced later this year. Correspondence seen by this newspaper said money raised by a stamp duty on premiums will be allocated by the Health Insurance Authority (HIA).
The rate of the annual stamp duty to be applied will be determined and introduced by an act of the Oireachtas.
The legislation is to be drafted in the coming months and will replace the interim scheme currently in operation.
The interim scheme has been heavily criticised by Aviva and Quinn Healthcare. Earlier this month, it was announced that the government would hike the health insurance levy from €208 to €285 for adults, and from €66 to €95 for children.
Up to 6,000 people are abandoning the health insurance market each month, as they cannot afford to maintain their cover.
Rival health insurers are unhappy that the Minister for Health, James Reilly, does not intend to regulate VHI until the end of December 2013.
This would mean the government postponing for nearly two years the investment of up to €220 million in the company’s reserves.
In September 2011, the European Court of Justice (ECJ) gave judgment against Ireland in a case taken by the European Commission.
The ECJ found that Ireland had contravened community law by failing to regulate the VHI in a similar manner to other private insurance entities in the market.
Director of Corporate Business
Irish Health Insurance
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