Aviva have, as predicted by www.irishhealthinsurance.ie confirmed the introduction of co payments or shortfalls across the majority of their plans for orthopaedic procedures in private and high tech hospitals. This is to come into effect on the 1st of January 2012. Members on these plans will continue to have full cover for private accommodation for orthopaedic procedures in a public hospital. Members who want full cover for these procedures in a private or high-tech hospital can avail of full cover on Level 2 Complete Health.

Unlike VHI they have not included ophthalmic procedures in these shortfalls and are directly communicating this change to the relevant members in their renewal letters and informing customers about the range of alternative plans available to suit customer’s needs and budgets.

Nonetheless this is not good news for consumers. I have been long convinced that this was inevitable in the long run and would end up becoming a market trend across all three insurers. From the point of view of a consumer this leaves older members with very few options within the health insurance market and most of them incredibly expensive.

However from the point of view of Aviva as a commercial entity, they would have been crazy not to introduce these shortfalls. Why? This business of reducing benefits was started by VHI and in my opinion was a way in which they could segment their book of business, isolate their older more expensive members and levy premium increases of up to 47% this year, leaving these members only two options:

1) Put up with the increase

or

2) Leave the VHI

The second option of course leaves the VHI in the comfortable space of being able to reduce their claims.

However if this demographic is to become someone else’s problem it is to be expected that the other insurers will employ the same rules to protect their commercial edge. However market savvy does not always equate to what is in the consumers best interest. From a market of approximately 187 plans soon there will be only a handful of plans suitable for the older members who built the VHI over 50 years.

When you consider that this market is annually offering free and half price kids one has to feel that something about this segmentation seems unjust. When signing the kids up for free it is worth considering the price your parents are paying for this.

This company has already made clear our opinions on this matter to the Minister for Health and he has taken this under advisement.

The result of this inevitable development is that it has now become even harder for consumers to navigate the health insurance market. The need for advice is now more important than ever before. Approximately 850,000 people will renew their policies in the next 4 months; we would urge all of them to seek independent advice in advance to ensure they are aware of their options.

Patrick Brennan

Director of Corporate Business

Irish Health Insurance

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