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Lifetime Community Rating

What is Lifetime Community Rating?

At present, everyone pays the same premium for their Health Insurance, regardless of their age, health status, gender, geographic area or other factors. This is known as Community Rating. With the introduction of Lifetime Community Rating (LCR), this will change from the 1st May 2015.

Under LCR, community rating is modified to reflect the age at which a person takes out private health insurance. Late entry loadings will be applied to the premiums of those who join the health insurance market at age 35 or over. If you take out private health insurance earlier in life, and retain it, you will pay lower premiums compared to someone who joins when they are over 34 years of age.

 

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Why is Lifetime Community Rating being introduced?

The primary reason the Government is implementing Lifetime Community Rating is to encourage people to sign up for health insurance before their 35th birthday. Encouraging more people to join the market at a younger age helps spread the costs of older and less healthy people across the market, helping to support affordable premium levels for all.

Who will pay this loading?

Anyone who takes out private health insurance at age 35 or over, and who does not have qualifying periods of credit, will pay a loading. The level of loading will depend on the age at which the person takes out private health insurance.  

How much will it cost?

From the 1 May 2015, if you are purchasing a private health insurance policy for the first time at age 35 years or older you will pay a 2% loading on top of your premium for every year you are aged over 34. For example, if you take out a private health insurance policy for the first time at age 40 you will pay 12% (2% x 6) more than someone who took out their cover before the grace period expired (30th April 2015). At 45, it would be 22% up to a maximum of 70% at age 69.

Under legislation, the loading cannot be waived by any insurance company.

How do I avoid this loading?

The only way to avoid the loading is to ensure you have a valid Private Health Insurance policy in place by the 30th April 2015.

Are there any exemptions from lifetime community rating loading?

Yes. Everyone who has health insurance at the end of the grace period (30th April 2015) will be assumed to have a continuous period of cover and therefore no LCR loadings will apply. In addition, the Regulations set out the circumstances when age at entry loadings can be reduced, where the customer has a qualifying credited period. A credited period can apply where individuals previously had health insurance. In addition, provision is made for a credited period (in total not exceeding 3 years) for individuals who previously had health insurance cover, but who stopped their cover since 1 January 2008 because of unemployment for a period of at least 6 months while being in receipt of a relevant social welfare payment. 

If I had private health insurance previously, but let it lapse, do I still have to pay the loadings?

Yes - but the level of loading will be reduced by the number of previous years health insurance cover.

Will my age affect the price of my health insurance policy?

Yes. If you take out private health insurance on or before the 30 April 2015, you will pay no loading. After 1 May 2015 if you are under 35 years of age you will pay no loading. However, if you are aged 35 or over, or have a break in cover in excess of 13 weeks, you will incur a 2% loading per year on top of your premium.

Will I have to pay a loading for the rest of my life if I continue to maintain my private health insurance cover?

Yes. The loading that applies when a person purchases private health insurance after the 1st of May 2015 will apply in subsequent years.

Why is LCR being introduced from age 35 rather than a younger or older age?

35 is considered to be an appropriate age to allow young people sufficient time to complete education and to achieve secure employment for a number of years.

 

Why has the loading rate been set at 2%?

The method used to calculate the rate of loadings is based on an assessment across all ages in the market. 2% per year is considered to be a reasonable rate of increase, without being overly punitive.

What is the maximum loading that will apply?

The maximum loading that can apply is 70% of the total premium. A loading of 70% will only arise on very rare occasions, where a person aged 69 or older is purchasing private health insurance for the first time.

Can an insurer make an exemption for me from the LCR loading?

The application of loadings will be mandatory and cannot be waived by an insurer.

What happens if I switch from one insurer to another?

Switching from one insurer to another or from one policy to another does not affect the applicable loading. Loadings, if any, will continue to apply and insurers are required to supply each other with proof of an individual’s prior cover.

Will the level of the loading be reviewed periodically and if so when?

The Health Insurance Authority will carry out a review of the operation of LCR after a period of two years.

Can I drop my private health insurance cover for a period of time?

Periods of up to 13 weeks without cover will be allowed without affecting your loading. If a break in cover of over 13 weeks occurs you will be subject to a loading.

Where can I get impartial information about private health insurance policies?

You can obtain details on our website www.cornmarket.ie or The Health Insurance Authority provides information on all policies available - www.hia.ie.