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Health insurance sector critically ill

Wednesday, March 20 11:15:09

A record 64,000 Irish people dropped their private health insurance cover last year alone, most of whom were the young and healthy signalling that the sector is seriously ill, according to laya healthcare boss, Donal Clancy today.

He warned that the private health insurance industry is becoming critically sick, perhaps terminal, and will die unless the price spiral issue is addressed by Government.

Mr Clancy issued the call to action at the National Healthcare Conference in Dublin today, which was attended by Minster Reilly.

This comes on the back of new research commissioned by laya healthcare which reveals that one in three private health insurance holders with children plan on cancelling their cover in 2013, with one in six (17pc) claiming they can no longer afford it.

But cancelling and downgrading their cover will put huge strain on young families with children with a staggering number (87pc) admitting they are worried about falling ill and having to rely on the public health system and 79pc say that they will delay non-emergency medical procedures and going to their GP (86pc) to keep costs down.

"We are very conscious that affordability and the consumer's ability to pay are front of mind in the current economic climate. The current system is unfair in that the majority of people on more basic plans are cross-subsidising those on the premium top-tier plans with all the frills. This is unjust and is fuelling a record market decline. Applying risk equalisation to a core, standard set of benefits would help stabilise the market and address the issue of fairness. We must reform health insurance if it's to survive and provide genuine benefits for our 465,000 members, BUT we must do it within the context of reforming the health system as a whole," Mr Clancy said.

"The most fundamental change the Government can make is to start incentivising, NOT dis-incentivising young, healthier people to take up health insurance. The introduction of lifetime community rating would mean that the younger you enter the private health insurance market, the more affordable it is. This would serve as a compelling financial incentive for younger people to enter the market, and stay in it," he concluded.