As the clock struck 12am on 1 January, fireworks were going off and people were popping Champagne but in VHI HQ, as well as head offices of Laya and Irish Life, tens of thousands of health insurance policies were auto renewing for another year. Was yours one of them?

January is the busiest month of the year for people renewing their health insurance. In Ireland, about 2.4 million people, or approximately 48% of the population have health insurance. Half a million renew in January alone, with 1.2 million renewing between December and February. So it’s on the minds of many at the moment.

Cooling off period

If you forgot to shop around, it may not be too late. Everybody has a 14-day cooling off period in which they can switch policies and providers, potentially securing themselves more benefits for less money. Moreover, if you are a Laya or Irish Life customer, you can change policies at any time during the year. You will have to stick with your provider but you could get yourself a better-value policy.

Now more than ever, it’s important to shop around. That’s because, in the past year, we have seen significant spikes across all providers. Since January of last year, VHI has had two rises, totalling an average increase of 7.4%. Laya has also had two rises, an average increase of 11.8%. Irish Life has had three – two in 2023 and another on the first day of this year, a total average spike of 14.3%.

Health insurance companies love using that term ‘average’. Because ‘average’ is masking the really high increases that some policies have been hit with — some as high as 15%-20%. What does that equate to in real money? Some families could be opening their health insurance letters this January, seeing their policy rise by as much as €550.

Explaining the increases

What’s the reason behind this? We frequently hear about increases in health insurance policies because of medical inflation, which is the rising costs of healthcare — the likes of new technologies, robotics, rising consultant costs and research and development into cancer drugs, for example.

However, in 2023, the number of claims rose considerably. This is linked to the fact that the last of the COVID-19 measures were lifted in April of last year. Many people who had put non-essential surgeries on the long finger now felt more comfortable to go back into hospitals to get those hip replacements or knee surgeries, for example. Health insurance providers, being in the business of predicting risk, should have forecast this better but because they didn’t, the spikes are now considerable.

Magic phrase

By picking up the phone, you could potentially make savings that counteract these increases. A recent HIA study found that 44% said it can be difficult to understand how health insurance works. So let’s simplify things. Here is the magic phrase you need to be asking – do you have a lower cost-equivalent?

Essentially, you’re saying, ‘I want to keep my benefits but I want to pay a lower price’. And they are obliged to tell you what policies are available. Be sure to give them all your medical history. Some people think, ‘Oh, if I tell them everything they will charge me more’. They can’t. In fact, you want them to know everything because what you don’t want to happen is to end up in hospital and find that your health condition is not covered.

Also ask about benefits and excesses. The person on the other end of the phone is sitting there with all your policy information in front of them.

Ask them, ‘If I had been on the plan you are suggesting last year, how much would I have paid out in excesses and how much would I have been able to claim back on my expenses?’ Compare that to your current policy so you actually are comparing apples with apples.

It is important to shop around but if you are comfortable with your current provider, make sure you are on the right policy with them.

Getting the best deal for you

Switching policies can save you hundreds of euros. To show just how much can be saved, Dermot Goode, Director of PHI Consulting, trading as Total Health Cover, shows us how three different households can make savings.

Retired couple

Older adults who may have additional health issues are the cohort of customers least likely to change plans. However, one retired couple can save €1,936 and get better benefits by switching policies.

“Very simply, they don’t want to lose their benefits,” says Dermot. “However, these are the people who can make the most amount of savings and potentially get better cover. This is especially the case if you are on some of the older policies that the health insurance providers offer.”

“Let’s take an example of John and Mary O’Brien, a retired couple who are customers of Irish Life. Both are on the Irish Life’s Business Plan Select. Their policy is costing them €3,169 each this January, a total of €6,044 coming out of their household expenses.

“That plan has increased by €309 each in the space of one year (€618 combined).

“We would be encouraging John and Mary to look at 4D Health 4. This would see them make a saving of €963 each, a huge saving of €1,926 in their household.

“Not only that but in most respects, 4D Health 4 provides better overall cover. For example, it covers private accommodation in private hospitals versus semi-private on the Business Plan Select. The excess is lower at €50 per admission versus €125 on the plan they are on.

“It also has better refunds on GP and consultant fees and it has three personalised packages, one of which is travel insurance. This isn’t available on the plan they are currently on.

“Where the Business Plan Select fares better is that the co-payment for listed orthopaedic procedures is €1,500 compared to €2,000 on the 4D Health 4 scheme.

“However, given the fact that they would be saving €963, this would more than cover the €500 difference, should they need to avail of it. More competitive policies for high level policies with VHI and Laya are also listed in table 1.”

Family package

Joe and Julie O’Kelly have a family package with Laya which also covers their two young daughters Sarah (6) and Lara (4). They have split level cover on Total Health Complete 175. It is costing them €4,000 a year — €1,551 per adult and €449 per child. This family policy has increased by €544 compared to what they paid last year.

Dermot says,“This family can stay with Laya but should consider switching to Inspire Plus for the two adults and the oldest child. Their second daughter can then go free under Flex 125 Explore. This would bring their premium down to €3,150, a massive saving of €850.

“In terms of differences, both plans cover the same public and private hospitals but the new plan Inspire Plus fares better with lower excesses on private hospital stays and more flexible refunds on out-patient expenses.

“Total Health Complete 175 does have a higher maximum limit on out-patient claims but the new plan still has a maximum limit of €1,000 which is more than adequate for most members. The Flex 125 Explore scheme doesn’t include guaranteed refunds on out-patient expenses but the fact that this plan is free for the second child is a very attractive deal.”

What kind of saving would a single adult make?

Adam Murphy is 32 and in good health and so he has an average mid-level plan with VHI called PMI 4115. This costs him €1,819 per year, an increase of €248 since he renewed last year.

“We’d be saying to Adam to consider switching to PMI 3613,” says Dermot. “He would save himself €273, thereby eliminating the increase he is seeing on his policy.

“There is very little to separate both of these plans. PMI 4115, the plan he is currently on, has a lower day-case excess of €50 per claim verus €75 per claim on PMI 3613 and his current plan has slightly better refunds on out-patient expenses. With all these plans, it is important to ring your healthcare provider and get them to explain the exact details but these examples show the significant changes that can be made.”