Key changes in health insurance cover

It is now critical that all members review their cover fully at renewal and they fully understand all benefits and contractual changes that will apply to their policy for the next insurance period, writes Dermot Goode.

The health insurance market in Ireland is constantly changing.  Prices are increasing nearly every month which is forcing increasing numbers to either reduce their cover or exit the market altogether.

Dermot Goode
Dermot Goode

Increased competition from the three insurers, VHI Healthcare, Laya Healthcare and Aviva Health has led to an increase in the number of plans now available (over 200), but increased product complexity makes it very difficult for consumers to make like-for-like comparisons.  Added to this is the recent introduction of ‘Restricted Illnesses’ on many mid range plans which means that even though you are paying higher premiums, cover for certain high-cost procedures has been reduced significantly.

It is now critical that all members review their cover fully at renewal and they fully understand all benefits and contractual changes that will apply to their policy for the next insurance period.  Below is a summary of some of the key changes worth noting.

Annual Contracts

Whilst all health insurance policies are for a 12 month period, previous custom and practice allowed customers to amend their cover mid-term.  However, VHI Healthcare now strictly operates the annual contract rule and it has amended its contracts to include financial penalties if you cancel your contract mid-term.  This rule essentially means that once you join or renew your policy, you must remain on this level of cover for the next 12 months.

It also means that if VHI Healthcare or another insurer launches a special offer that appeals to you, you will not be able to avail of it without breaching your existing contract.  Laya has recently confirmed that it will be enforcing the annual contract rule and it is expected that Aviva Health will follow shortly.

Restricted Illnesses

Two of the health insurers have now introduced restricted illnesses on certain plans.  For example, on many of their mid range or level two plans, VHI Healthcare has reduced its cover for a specific list of 22 procedures carried out in private hospitals to 80 per cent cover which means the member will have to cover the 20 per cent shortfall themselves.

Similarly, Aviva has introduced a maximum co-payment of €2,000 for a list of nine procedures.  These procedures are mainly orthopaedic and these restrictions only apply in private hospitals.  To date, Laya has not introduced any such measures on their plans.  This is an important development for all members as failure to check your cover in advance of a private hospital admission could result in a substantial shortfall.

It also raises an issue in relation to upgrade rules.  If you are on a policy with ‘Restricted Illnesses’ and you subsequently switch to a plan with no such clause, you may still be subject to the same benefit restriction in respect of any conditions that were present prior to the change in cover.

New waiting period for policy upgrades

All three health insurers will apply an upgrade rule if you increase your hospital cover for an existing medical condition.  This means that any claims for the existing medical condition will still be paid on the basis of your previous cover for a period of 2 – 5 years depending on your age.  For any new condition that arises that wasn’t there before the change, industry practice has been to apply the new benefits to any claims for this condition. However, VHI Healthcare has now introduced an amendment to the upgrade rule which means if you upgrade your cover, the higher benefits will not apply until a minimum waiting period has been served, regardless of whether this is a new condition.  This waiting period ranges from six months to two years depending on your age at the time of changing your cover.  Essentially, this means that you will be paying for something from which you can’t benefit for a set period of time which should be considered by all members before altering their cover.

Whilst considerable savings are still possible without having to change your insurer, the above developments make it essential that all members properly review their cover either directly with the insurer or with an expert advisor to ensure that their cover meets their present and ongoing requirements.

CornmarketDermot Goode
Cornmarket Healthcare Division
Tel. 1890 252 140
www.cornmarket.ie

Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland.  A member of the Irish Life Group plc.  Telephone calls may be recorded for quality control and training purposes.