PMI Article

Health Insurance considerations for those over 50.

Health insurance costs are continuing to spiral with VHI announcing another increase on a range of their corporate plans from 15th April next by between 5-11%. However, having quality healthcare cover in place has never been more important, especially for older consumers.

All health insurance members need to brace themselves for a shock when their renewal notice lands. The latest price hikes across all insurers combined with the recent reduction in tax relief will force many consumers to shop around for better value cover. Your first port of call should be your existing insurer. Ask them to find you the “nearest equivalent plan based on your existing cover across their entire suite of products including corporate, teacher and other plans”. The objective is to make your insurer do the work for you rather than you trawling through a range of their plans. Whatever alternative they propose, ask them to explain “exactly what you’re losing and gaining” compared to your current cover. Often, the insurer will suggest sending the information to you for you to review. Always keep them on the phone and have them explain everything to you in full. Be very careful reducing your cover especially if you are over 65 years old. Whilst you can always increase your cover at each renewal, any existing conditions will be subject to the Upgrade Rule where your cover will be based on your old plan for a period of 2 years for these conditions. If you are over 65, this increases to 5 years.

Many older consumers query why they have to still pay for benefits such as maternity cover. This is due to the Minimum Benefit legislation which means that every plan on the market has to have minimum cover in respect of hospital accommodation, psychiatric, out-patient and maternity cover to name a few. Without this, insurers would be free to develop policies that might be more attractive to certain segments of the market.

Covering adult dependents (aged over 20 on most plans) has now become extremely costly as the full adult rates apply regardless of whether they are in full time education or not. Splitting your cover is an essential tactic here to reduce your overall costs. For the most part, these dependents are healthy and don’t need to be insured on the traditional level two hospital plans such as VHI Health Plus Extra (€2,234), Laya Essential Plus (€2,345), Aviva Level 2 Hospital (€2,152) or Glo Best Plan (€1,369). Opting for quality corporate plans with each of these insurers could reduce your cost for this adult dependent to anything from €1,128 - €1,297 depending on the insurer. By opting for a lower level plan (public and private hospitals) with an excess for private hospital admissions only, you could opt for one of the following options;

• Vhi One Plan 250 @ €807 per adult
• Aviva First Focus @ €849 per adult (covers selected public and private hospitals)
• Laya Essential Connect Family @ €900 per adult
• Glo Better Plan Saver @ €860 per adult (includes 2 free personalised packages)

Be careful where your son/daughter commits to looking after their cover. Whilst these are words every parent would love to hear, we’ve had situations where despite the best of intentions, the new policy was never put in place This only comes to light when hospital cover is required to discover that there is no valid policy in place!

For older members with young grandchildren, they can insure these dependents on their policy if they wish. This is becoming more commonplace as young families struggle to retain their own cover and this is a way of keeping their children on cover. Watch out for free or half price cover offers for children under 18 which are available to everyone. For example, GloHealth are still the only insurer offering free cover for all children under 3 years old on their Better Plan Saver or higher.

For members approaching retirement, make sure that you contact your insurer directly to arrange continuity of cover when you leave your employer scheme. Whilst most employers will facilitate this on your behalf, you don’t want to find yourself without cover simply because the insurer wasn’t notified. Remember, the contract exists between the individual member and the insurer regardless of how payment is made. If there is a lapse in cover of more than 13 weeks, all insurers are entitled to treat you as a new member subject to full waiting periods.

For those over 50, there is still great value in the market if you know where to look. For VHI members on Health Plus Extra (€2,234), they could consider Health Plus Excess (€1,599). This plan has 90% cover for listed major heart surgeries in the high-tech hospitals and carries a €75 excess for private hospital admissions. However, 2 adults can save €1,270 with this option.

Those Laya members on the Essential Plus scheme (€2,345) should change to the HealthWise Plus No Excess (€1,650) for identical cover with a saving of €695 per adult.

For Aviva members on the Level 2 Complete Health (€2,610), they should consider the Level 2 Hospital Excess plan (€1,577). Whilst it covers the same hospitals, it carries a €75 excess for private hospital admissions and a €2,000 co-payment on 10 major orthopaedic procedures. Total savings here would be €1,033 per adult.

GloHealth are now firmly established as the fourth player in the healthcare market. Their Best Plan at €1,369 provides excellent cover for public and private hospitals with three free personalised packages included. This plan also includes a €2,000 co-payment on 10 major orthopaedic procedures.

Finally, below are a number of ‘essential guidelines’ to ensure you are not over-insured and that your cover ‘works for you’ in the event of a claim;

• if you are on the same level of cover for 3 years or more, the odds are that you’re over-paying for your cover;
• if you have all the family on the same plan, then you are missing out on potential savings;
• if you are covered for a private room in a private hospital, you should consider dropping one level. The private room is never guaranteed and the savings could be significant. Be careful paying for something you might not receive!
• if your consultant is referring you for a procedure, always ask for the procedure code and check this in advance with the insurer to make sure you’re covered;
• finally, approach your health cover as you would car or home insurance. Shop around at renewal for the best deals; get proper advice if you have a good advisor; make sure any alternative policy meets your requirements; and if you’re happy, then switch!!

Dermot Goode

All prices quoted are net of tax relief at source and are correct as of 12/5/14 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.