Lifetime Community Rating legislation (LCR) came into effect on the 1st May 2015 to encourage people to purchase health insurance at a younger age. Late entry loadings now apply for people aged 35 and over when taking out health insurance for the first time. The loadings are set at 2% per year starting at age 35. This system replaced the previous community rating system that meant all adults paid the same premium regardless of age. As LCR reaches its 4th birthday we take a look at the effectiveness of the legislation and if those who took out cover remain insured on a suitable plan.
The introduction of LCR was effective in getting people back on Health Insurance. In April 2015 alone, the number of people with health insurance increased by 75,000. The majority of these people were members that had cover previously which they subsequently lapsed during the economic downturn before then re-joining to avoid the new penalty loadings. At the time LCR was introduced, most consumers did not shop around when purchasing cover, simply opting to take out the cheapest plan available to avoid financial penalties for late entry. While all providers had plans available for around €500 the question needs to be asked; did these plans offer value for money?
If you haven’t needed to use your health insurance since re-joining in 2015 this is great but for members that have needed to claim who joined these entry-level plans have found their cover to be very poor as most basic plans provide no cover for treatment received in private hospitals.
The most popular plans when LCR was introduced are listed in the Table 1 below and opposite it is current pricing which members will be offered at their renewal.
The plans listed below are all entry level plans which provide very limited or no cover in a private hospital setting. Most insurers have applied modest increases to these plans in the hope that clients would renew without shopping around (which most have done). While these plans will prevent members from having to pay a penalty loading in the future the fact remains that cover available on each of these is extremely limited.
We all want to save money, however, if you are currently insured on one of the above plans you need to be realistic in terms of savings that can be made. The cheapest policy on the market at the minute is priced at €440**. There is minimal difference between the above policies both in terms of pricing and cover. If you’re primary concern is simply to maintain cover to avoid the loading these plans will tick the box but if you want access to all hospitals you should think about reviewing your cover. A look at your table of benefits will quickly highlight the holes in cover.
There have been plenty of changes in the market since 2015 and if you have not shopped around since joining or re-joining to avoid the loading you should look at reviewing your cover this year before your 14 day cooling off period expires.
For a slightly higher premium members can upgrade to gain access to private hospitals, with that comes speedier treatment times and greater choice. If cover for everyday medical expenses such as GP and consultant visits are important there are plans available which would be more suitable again.
Best Alternative Options with access to both public and private hospitals are listed in Table 2 below:
Call one of our health insurance experts on 01 420 0999 today to review your cover.
All prices correct with effect from 1st April 2019 – Source Health Insurance Authority. *Glo & Aviva now taken over by Irish Life Health, New Plan name Kick Off ILH & Select Starter. **VHI’s Start Plan costs €439.93 net per adult
Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. which is part of the Great-West Lifeco Group of companies. Telephone calls may be recorded for quality control and training purposes.Irish Life Health dac is regulated by the Central Bank of Ireland. Vhi Healthcare DAC trading as Vhi Healthcare is regulated by the Central Bank of Ireland. Laya Healthcare Limited, trading as Laya Healthcare and Laya Life, is regulated by the Central Bank of Ireland.