If you are a company about to set off into a tender process in quarter 3 or 4 of 2013, there are many considerations and specifics that your tender may not be taking account of.  There are often also many irrelevancies included, but perhaps we will deal with them in a separate post!

Health Insurers cannot give promises to companies of no or low price increases for their health insurance plans.  One can understand why HR and Finance Directors try to get a good indication of potential health spends for impending budgets.

However, beware of insurers who are not realistic at “beauty parades” or renewal meetings.  Market forces including government intervention have seen huge hikes in the cost of private health insurance in the last number of years.  In fact it’s fair to say that the total premium increases in the market in the past 12 to 18 months have been more to do with government intervention than medical inflation or health insurers profiteering.  The question now is, have companies (both large Corporates and SME’s) been pushed to their tipping point in terms of health spend?  Head offices in New York and London are beginning to take action on “Health Expenditure” in Ireland on foot of seeing double digit increases.  Some measures include their presence at renewal meetings or being part of the tender process directly.

Regular review meetings with ones insurer or even potential insurers – quarterly for the larger schemes will keep the HR Director informed of market changes and ease the “price shock” for the Financial Director at the next renewal.

Government legislation and intervention has a huge effect on pricing so without knowing in advance, an insurer cannot know what variables are likely to radically change their pricing models unless they were to have a stronger, closer relationship with the Department of Health.

With the impending redesignation of public beds in public hospitals set to give insurers significantly higher claims costs and with the recent increase in the government levy for the higher “advanced” plans by a further 22% , where to now ?

Firstly, there is a choice of 4 insurers, Vhi, Laya Healthcare, Aviva Health and GloHealth.

Within those 4 companies, there are over 260 plans to choose from and 5,500 different options with GloHealth’s personalised packages and other additional add ons.

So where does a company go from here?

Prioritise the level of cover and type of benefits they want to offer their staff.

A semi private or private room in a Public Hospital / Private Hospital?

Inpatient excesses:  None or small excesses that can be payable per claim or per night in a Private or High Tech Hospital

Decide on the level of excess for Private or High Tech Hospitals

Do your employees require access to Blackrock Clinic, Beacon Hospital, Mater Private or even Galway Clinic or Hermitage?

Do you know the difference between a Day Case procedure, a General Procedure, a Listed Special Procedure or Listed Cardiac Procedure?

Different companies treat these procedures in different ways and even within their product range?

Would you be prepared to have a shortfall or co-payment for certain orthopaedic or ophthalmic procedures in return for a lower premium?

Which is more important?

Money back on day to day medical expenses like GP or Physiotherapy visits or access to a High Tech Hospital for when that ”medical mishap” does occur and requires greater or better access without costing an arm or leg in a High Tech Hospital.

Isn’t this the reason for private health cover?

A plan without cover for day to day medical expenses will tend to be cheaper.

Do you know the difference between an outpatient and a day to day excess?

How important is overseas and A&E abroad cover? How many consecutive days or total days does one need?

Will pre-existing conditions be covered with any associated or bought in travel insurance?

Does your plan offer an Employee Assistance Programme for your employees?

Do you deal direct with the insurer or use the services of a broker or intermediary specialising in health insurance or an Employee Benefit Consultant?  Do you know the differences or the costs associated with them?

What type of out-patient scans are more important to have full cover for? Where and how many centres are you happy to have full cover for?

How often do you want to be able to reclaim medical expenses?

Are you paying a premium for paying monthly?

These are just some of the questions that company decision maker needs to consider.

In a later blog we will look at how insurers might react to pricing pressures by changing some of the benefits in their plans.

Patrick Brennan

Irish Health Insurance