Health insurers accused of forcing elderly to pay more

Health insurers have been accused by their regulator of deliberately targeting younger, healthier consumers and disadvantaging older members.

Benefits on plans and the pricing for different products are being used to segment the market. This is where some of the most attractive plans are designed for, and marketed at, younger families who are less likely to make claims.

Older members are shunned by insurers as they are seen as expensive because they are more likely to need costly medical treatments.

The Health Insurance Authority, in its annual report, called for a review of the regulations to counter the fact that older people end up paying more for cover.

The average person over the age of 60 is paying a premium that is 25pc more expensive than their younger counterparts, the authority said.

Large numbers of the over-60s are still on the VHI’s HealthPlus Access, which used to be called Plan B.

This costs up to €2,092 a year, according to health insurance broker Dermot Goode.

“There is some segmentation of the market through a combination of targeted product features and differences in pricing for different products which has resulted in older insured persons, on average, paying more for health insurance,” said Health Insurance Authority chief executive Don Gallagher.

He called on Health Minister Simon Harris to trigger a review of the regulations that stipulate the minimum benefits that have to be carried on each plan.

This could counter the techniques used to target schemes at younger people.

A system of community rating is meant to apply to health cover, which means the same price is supposed to be charged to everyone for the same level of benefits, irrespective of their age and health.0:14

But insurers get around this by offering the best value plans to young families.

These plans can have free cover for children, and fertility treatment.

Such plans have no appeal for older people as they often have less cover for the likes of orthopaedic procedures.

Mr Gallagher added: “The authority is of the view that a review of the regulations could reduce the range of techniques through which insurers seek to segment consumers and differentiate product prices by life stage, which can undermine the principle of community rating.”

He stressed that insurers are legally obliged to apply the same premium rate for each product regardless of the age, gender or health status of the insured person.

There are now 373 different health plans on the market, up 13 from the end of 2015.

The market is hard for consumers to navigate due to the large number of products and the rate at which products or their prices are updated, according to the authority.

Average premiums per person rose marginally by 0.3pc in 2016 to €1,177 per person.

The authority’s annual report shows there has been a rise of 127,000 in the numbers with health insurance since 2014, to a total of 2.025 million people.

This represents 46pc of the population.

The largest increase has been in those under the age of 50, according to data compiled from VHI, Laya and Irish Life Healthcare.

“The increase has been proportionally greater among younger age groups, with a net increase over the past two years of 85,000 in the number insured in the below-50 age category,” said Mr Gallagher.

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