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Blog Homepage > Lifetime Community Rating 3 Years on

21/05/18

What is Lifetime Community Rating?

 

Lifetime Community Rating (LCR) legislation was introduced by the government on the 1st May 2015. Under LCR, community rating was modified to reflect the age at which a person takes out private health insurance with late entry loadings or penalties being applied to the premiums of those who join the health insurance market 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 3rd birthday we take a look at the effectiveness of the legislation and the financial impact on those who purchased a policy to avoid the penalties but who have not reviewed their cover options since.

 

What happened after LCR was introduced?

 

The introduction of LCR legislation was a milestone moment in health insurance and as such all providers offered entry level plans at competing premiums with each provider wanting to be able to offer the cheapest plan on the market. Most consumers did not shop around when they purchased their cover but rather opted to take out the cheapest plan available.

In 2015 entry level plans provided across all insurers was €448** on average as you will see in the table below:

Provider – PlanApr-15Apr-18
Laya - Assure Protect€419€536
Glo* - Kick Off€510€555
Aviva* - Select Starter€425€486
VHI - Start Plan€439€448

Source: Cornmarket May 2018

*Glo & Aviva now taken over by Irish Life Health

** This average was based on the 4 provider’s plans in April 2015

However since then a majority of insurers have applied modest increases to these plans in the hope that clients would renew without shopping around (which most have done). Whilst 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. For a slightly higher premium members can upgrade their health insurance plan to gain access to private hospitals and with that comes quicker treatment times along with greater choice.  For example; if cover for everyday medical expenses such as GP and consultant visits are important there are plans available which would be more suitable.

 

Best alternative options with access to private hospitals:

 

Level 2 Alt2018 Price
Laya - Advantage 500 Explore€765
Irish Life Health - BeneFit 1€799
VHI - One Plan 500€731

Source: Cornmarket May 2018

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. There is minimal difference between the above policies both in terms of pricing and cover. If your primary concern is simply to maintain cover to avoid the loading these plans will tick the box, however 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 your 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 charges you should look at reviewing your cover this year before your 14 day cooling off period runs out.

As Ireland’s largest health insurance broker, Cornmarket can help to find you the right plan. To avail of our Health Insurance Comparison Service click here or call (01) 420 0999.

 

 

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.

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. Laya Healthcare Limited acts as an agent for healthcare products for Elips Insurance Limited and is a private company limited by shares registered in Ireland, No 242048.

 Irish Life Health dac is regulated by the Central Bank of Ireland.