I worked for BUPA Ireland. This decision looks like it's a kick in the teeth to the average, middle income family because of the €160 per adult/€63 per child levy, assuming the insurers pass it onto the consumers.
Kitty, can you tell us if Vhi will be passing this levy onto its customers?
not heard from hibernian or quinn on this one either
And let's be very clear here. The ONLY way that premiums could have become risk rated is if the Health Insurance Acts were changed to allow it. Even the recent supreme court ruling, which struck down risk equalisation, confirmed that community rating stayed in place. Everyone on any given plan paid the same rate.
As for the ugly picture being painted for over 50's, can you elaborate on this? Were over 50's being faced with massive premium hikes if this move didn't go through? (Bearing in mind these are community rated products and the price increase one customer gets has to apply to all customers). Indeed, how does this resolve Vhi's arguments that they are paying out more money per "older" customer than the other two health insurers? That's still going to happen, isn't it? If I understand this initiative correctly, the levies received will directly fund the higher tax reliefs available. So VHI's claims costs will still be of a similar pattern to the last number of years. Won't the "death-spiral" still continue?
The main point that people were putting forward after the Supreme Court ruling was that the other two health insurers would launch products that would have younger people flocking in their droves and leave the older people out in the cold and therefore increased.
This could have been resolved by updating the Minimum Benefits regulations so that it included benefits and services that would be relevant to all generations, including the older.
And to close the loop, the Minister could have introduced regulations governing the marketing of health insurance products to ensure they were being marketed openly and fairly. The health insurance acts allow this.
that would be good... No adds for Mr quinn during Podge and Rodge this week, you must advertise during the Late Late and the Dail report... someone from competition authority would probably have something to say on that one
It should also be pointed out that when VIVAS launched, their products appeared to be very much aimed at the younger age market (eye laser surgery, teeth whitening, new maternity benefits). But 4 years on, they are still the smallest player in the market. The younger age market didn't migrate to them in any fashion that could have caused the market to de-stabilise.
Instead the Government, deciding that some window etching needed to be done, felt the hammer and chisel would be the best tool...
EDIT: Oh, to answer the original poster's question, my understanding of how this works is that the levy is collected from the insurer for each member they have. This levy is paid directly to the Exchequer which will then pay for the increased tax relief that the over 50s get. What I don't know though is what happens if an over 50 is on a product that costs less than the tax relief available? e.g. Plan B is currently €665 (give or take). An 82 year is entitled to tax relief of up to €1,175. Does the 82 year old pay anything?
