Hibernian Aviva Health strongly criticises the decision by the Department of Health & Children to increase the health insurance levy from tomorrow, 1 January 2010, to €185 per adult from €160 and to €55 per child from €53.*
The increases mean that Ireland’s 2.3 million health insurance customers will continue to pay higher premiums than necessary as a result of these increased subsidies to the VHI.
Jim Dowdall, CEO of Hibernian Aviva says the company is extremely disappointed that the Department of Health & Children has decided not only to maintain but also to further increase the health insurance levy.
“This levy is exchequer neutral and serves no purpose other than to provide additional finance to the VHI. If this levy was not forced upon us, we would immediately reduce the cost of health insurance by up to 30% on typical plans. Instead, competitors are being required to pay an increased subsidy to shore up the VHI’s inefficient and loss making business (estimated to be in the region of €80 million loss in 2009).”
“We have consistently called for meaningful engagement to determine a viable structure for this market – one which has all consumers interest at its core. However, the Department of Health & Children and the Health Insurance Authority appear to be focused on protecting the current market state regardless of the impact on all health insurance customers and the negative impact on competition in the market.”
Today, for the fourth time, VHI has failed to meet a government deadline to become regulated by the financial regulator.
Being unregulated, it does not have to comply with the measures designed to ensure consumers’ interests are protected, including operating in accordance with all various Consumer Protection Codes and meeting minimum solvency requirements defined by the financial regulator. This is despite the instigation of proceedings by the EU against Ireland in early 2009.
Jim Dowdall says: “As a result of this failed policy, health insurance will become unaffordable for many customers and more people are being forced to fall back on an already overburdened public health system. In the interests of all health insurance customers and Ireland’s taxpayers, it is critical that the government reconsiders this strategy and takes a new approach to ensure affordability of health insurance for all those who decide they require this protection for themselves and their families.”
*:
* From 1 January 2010, the following changes will apply:
Health Insurance Levy:
From €160 per insured adult to €185
From €53 per insured child (under 18 years) to €55
Age related tax credits:
2009 rates 2010 rates
50-59 €200 €200
60-69 €500 €525
70-79 €950 €975
80+ €1.175 €1,250
