Health Insurance Update November 2014

The health insurance market is about to enter its busiest phase. Approximately 50% of the market renews between December and March each year with nearly 20% of the market renewing in January alone. Many consumers who missed the increases that came into effect in February and March this year will be shocked when they receive their renewal notices. Advisors need to begin communicating with their customers in advance of these renewals to let them know that help is at hand.
Unfortunately, many consumers are still insured on dated plans which no longer represent good value for money. These are good plans but as they’ve been on the market for some time, they’ve been hit by numerous price hikes and are just too expensive. Fear of switching is one of the biggest blockages to consumers generating much need cost savings and this is compounded by the number of plans on the market and perceived complexity trying to make like-for-like comparisons. The reality is that with over 300 plans, there are options to suit all budgets and healthcare requirements. So, for any of your customers who are on the same plan for two years or more; who have all the family on the same level of cover; or if they are paying for extras such as a private room, then they are over-paying for their cover and they need your advice.
Most importantly, you need to focus on your renewal book. Many of your customers will need to reduce their costs and will need your advice in selecting the most appropriate lower-cost option. Without advice, some will simply opt for cheap cover without checking the benefit details. For example, many consumers are now on plans with a €500 excess which means that for any overnight admission to private hospitals, they are liable for the first €500 of the hospital bill. Two separate admissions could wipe out all their savings. When faced with hospital treatment, these consumers will probably take all steps possible to avoid using a private hospital simply because they can’t afford the excess. They also need to understand the ‘upgrade rule’. Whilst you can increase your cover again at your next renewal date, any existing conditions will still be covered under the previous cover for at least two years which is often not fully explained or understood. Many customers when they fully understand the consequences of reducing cover opt for different plans. Alternatively, they can split their cover, i.e. have everyone on different plans based on their personal requirements and therefore you only pay for the cover you need.
Also, watch out for the latest versions of existing plans. This is especially the case with some corporate plans where an equivalent plan is launched under a different name but at a lower cost, e.g. Aviva customers who were on Business Plan Select may have moved to the Health Plan 06 which has been overtaken by Health Plan 16 and now many of these customers are gradually moving to the new Be Fit 2 plan. Customers will not be able to track these developments and will need your advice in this regard. Also, many customers still believe they’re not entitled to these ‘corporate’ plans. As you know, every plan that’s on the market is available to all consumers irrespective of who the plan may be targeted at.
In terms of special offers, many of these are coming to an end. The VHI and Laya half price offers for child cover will finish on 31st October and the GloHealth half-price offer finishes on 7th November. Aviva Health have announced a discounted offer for children aged 5-17 on their Family Value plan which comes into effect on 1st November. They are also discounting the adult rate on some existing plans and introducing other new plans from the same date. You will need to update all your rate and comparison charts to reflect these changes. Also, bear in mind that for young families with children under 3, GloHealth is the only insurer offering free cover for these children on most of their mainstream plans. Once again, consumers can split their cover, e.g. leave one adult with the existing provider and switch the other adult and the child to GloHealth to avail of the savings.
Finally, a word of caution. The vast majority of your customers will need to reduce certain elements of their plan to keep their cover affordable. It’s critical that you explain all product differentials including in-patient excesses, co-payments, reduced hospital cover and also the upgrade rule to ensure that the new plan meets their exact requirements and no issues arise at some future stage.

Dermot Goode: Health Analyst with www.totalhealthcover.ie
All prices quoted are net of tax relief at source and are correct as of 01/10/14 as per www.hia.ie (Health Insurance Authority).
However, prices and benefits are subject to change and consumers should confirm all details directly with the insurer in question.
PHI Consulting (Ireland) Ltd trading as Total Health Cover is regulated by the Central Bank of Ireland.