The Health Insurance Authority, the independent statutory regulator of the private health insurance market in Ireland, provides advice to my Department on an ongoing basis, including in relation to market statistics and developments. The main relevant market developments over the past five years are as follows:
- The number of people who currently hold private health insurance is 2.047 million (end-September 2013) or 44.6% of the population. The number of people insured has been in decline since its peak at almost 2.3 million, or 50.9% of the population, at the end of 2008.
- The Health Insurance Authority data indicates that, in the 12 months to end-June 2013, the average premium paid to commercial insurers was €1,095 gross (adults and children combined), which represents an increase of 59% over the corresponding five-year period.
The following tables show the breakdown of membership by age for each of the commercial health insurers over the last five years.
|
End Dec 2012
|
Aviva Health
|
Glo Health
|
Laya Healthcare
|
Vhi Healthcare
|
|
0-49
|
19%
|
1%
|
25%
|
55%
|
|
50-59
|
19%
|
0%
|
21%
|
59%
|
|
60-69
|
15%
|
0%
|
20%
|
65%
|
|
70-79
|
12%
|
0%
|
16%
|
78%
|
|
80+
|
6%
|
0%
|
6%
|
89%
|
|
Total Market Share
|
16.9%
|
1.0%
|
21.5%
|
56.4%
|
|
End Dec 2008
|
Aviva Health
|
Quinn (Laya) Healthcare
|
Vhi Healthcare
|
|
0-49
|
9%
|
25%
|
65%
|
|
50-59
|
6%
|
20%
|
74%
|
|
60-69
|
3%
|
15%
|
82%
|
|
70-79
|
1%
|
7%
|
92%
|
|
80+
|
1%
|
3%
|
96%
|
|
Total Market Share
|
5.4%
|
21.6%
|
66.8%
|
The tables show a significant disparity in the membership age profile, and thus the associated costs, across the four commercial insurers. VHI Healthcare continues to have a much greater proportion of members in the age groups 60-69 and above when compared to other insurers. Insurers with more older customers have higher claims costs. For example, in 2012:
- VHI had market share of 56% but had 67% of the total claims paid in the market.
- Laya had 22% market share but had 14% of total claims paid in the market.
- Aviva had 17% market share and 13% of total claims paid.
Given the disparities in claims costs, mostly related to age and health status, between competitors operating in the health insurance market, risk equalisation has been the mechanism used to create a level playing field in the market. It does so by providing risk equalisation credits (based on age, gender and level of cover) in respect of insured people aged 60 years and over. The aim is to distribute fairly some of the differences that arise in insurers' costs due to the differing health status of all their customers. The Health Insurance (Amendment) Bill 2013, which is scheduled to pass all stages of the Oireachtas later this week, sets out revised risk equalisation credits and the corresponding stamp duties that will apply under the RES from 1 March 2014 and will further improve the effectiveness of the Scheme overall. These revised credits should further level the playing field within the market, by making older clients less costly to insure.
