VHI and Laya Healthcare to hike their premiums again 

When one health insurer moves the rest seem to follow unfortunately. And this time it’s no different. 

Two of the country’s main providers are to up their prices yet again for policyholders, marking another blow to consumers still grappling with the high cost of living.

VHI is hiking its premiums by an average of 3.5% from the start of October, which comes on the back of a separate 7% hike in March. However these are average price hikes across all VHI policies. Depending on the type of plan someone is on, the increase could be even higher. 

The average health insurance premium is now around €1,600 according to the Health Insurance Authority (HIA) though it obviously varies wildly depending on the plan you choose. So when the twice price hikes announced so far this year are taken into account, the average VHI policyholder will be looking at paying around €170 to €180 extra come renewal. Maybe more, especially those on family plans. 

In better news, VHI has said that it's reducing the cost of children's premiums on selected plans by 25% from 1 October while day-to-day benefits have also been added to some plans that previously didn't have this benefit.

Laya meanwhile is increasing its premiums by an average of 6.5% from October following a 7% hike in April.

Both insurers have blamed a rise in the demand for healthcare, an increase in the cost of new drugs, and rising general medical inflation for the hikes. Policyholders are also increasingly going the private route for minor injuries, bypassing ever crowded A&E rooms, and using the insurers' Urgent Care/Swiftcare clinics instead.

Underlining the increased demand on health insurers, research from the HIA found that in 2023 the number of claims rose by 15% compared to the previous year and reached a record €2.9 billion in value.  

We have taken the decision to introduce a price increase from 1 October as premium income has not kept pace with healthcare demand and associated claims costs. We have to price prudently for the future so that we remain in a position to meet the healthcare needs of our members.

Aaron Keogh, Managing Director of VHI

Do we need more competition in the market?

Given the relentless rise in health insurance premiums over the past two years, many are wondering if we need more competition in the market. 

And the good news is that Aviva is planning to re-enter the health insurance market over the coming months. 

But whether consumers can look forward to lower premiums is debatable.  

A new provider will obviously lead to more choice. Mind you, there are already over 300 health insurance plans on the market for consumers to choose from. So one could argue that there's more than enough choice already. And more competition in a market will usually only lead to lower prices if it’s a lack of competition that’s keeping prices high in the first place. 

However, in recent years, an increase in the number of claims, partly as a hangover from Covid, as well as rampant medical inflation (which has been running far in excess of general inflation for years given the huge costs of new treatments) has been behind most of the hikes in premium costs.

That's not going to change with a new provider unfortunately. In short, more insurers may not make much of a difference in a market where rising costs are the main factor behind rising premiums. Indeed it was hoped Laya’s takeover by Axa last year might lead to lower premiums, but that certainly hasn’t happened as the insurer has announced several premium hikes since.   

However Aviva's entry may at least keep premiums more stable. And consumers who have their car or home insurance with Aviva may be able to avail of a multi-policy discount.  

Don’t just renew - remember to review 

There are still potential savings to be made by shopping around come renewal time. And in some cases you could even end up with better cover too. So don’t just accept the price hike when your renewal letter comes in the post. 

For example the most up-to-date plans will provide cover towards things such as the HPV vaccine, online doctors, genetic testing, sports-related injuries, home birthing, gender reassignment, and psychiatric and mental health treatment, which older plans may not.

And if you switch insurer you won’t have to serve any waiting periods again – as long as you switch within 13 weeks. This is not known by some people and is a barrier to switching. And if you switch insurers while you are serving a new customer waiting period, the amount of time served with your first insurer will be taken into account with your new insurer.

And regardless of your current health or claims history, any new insurer must take you on - by law they cannot restrict you from cover. Unlike other forms of insurance, your previous claims record or age has no bearing on the price you pay or the options available to you. 

In short, everything you're accustomed to with your current provider will be available with a new provider.

The HIA offers a free and comprehensive comparison tool to help consumers compare health insurance policies. And there are also independent health insurance experts who, for a small fee, can conduct an over-the-phone consultation with you and recommend an appropriate plan.