New Health Insurance Company Enters Market

mike65

An ex-Aviva managers led company is entering the market with a new company that is promising a new range of products backed by a German finance house.

Free cover for the under 3s looks like being a selling point. With the overall market contracting as prices rocket it'll be open to question what difference Glo Health will make - they seem to targeting young high income families and corporates.

Doodah7

So now we have : VHI, Laya, Aviva and Glo Health. It will be interesting to see if we get true competition or just the usual facade...

él statutorio

Irish Life owns 48.95% of Glo Health.

Not sure if that's a good or a bad thing.

coylemj

él statutorio wrote: »

Irish Life owns 48.95% of Glo Health.

Not sure if that's a good or a bad thing.

So what's your point, why would it be a 'bad thing'? Irish Times (see link in post below) says it's 30%.

coylemj

http://www.irishtimes.com/newspaper/finance/2012/0702/1224319184010.html
http://www.breakingnews.ie/ireland/fourth-health-insurer-to-enter-market-557571.html
http://www.glohealth.ie/

Although the Irish Times says that Oliver Tattan is involved, he's not mentioned on the Glo website as one of the senior execs. Tattan was the founding CEO of Vivas, having previously been CEO of the VHI.

él statutorio

coylemj wrote: »

So what's your point, why would it be a 'bad thing'? Irish Times (see link in post below) says it's 30%.

Sorry I wasn't trying to be scaldy or anything. It might not be bad at all. They might help bring down prices, or they just might stick with the Status Quo. We'll have to wait and see.

The IT figure of 30% is wrong. The correct figure is 48.95% (according to an internal Irish Life mail that went around this morning), they also have 3 seats on the board there.

CCFROM

The ownership structure is interesting in all these companies.

VHI unregulated by IFSA, 100% state owned
Aviva Health have a minority share held by AIB bank also 100% state owned.
GLO Health with 48.65% share held by Irish Life also 100% state owned.
Laya Healthcare owned by 4 ex managers and backed by Swiss Re

Interesting times ahead in the coming weeks and months ...

coylemj

While I'm all for competition in this health insurance market, the way that Mary Harney allowed BUPA to come into the Irish market and do a 'smash and grab' was an utter disgrace.

What BUPA did was to set up in business here, grab a huge slice of the corporate (especially US companies with young employees) market, make a packet and then flog the business to Quinn when the 'risk equalization' chickens were coming home to roost. They paid millions to lawyers to fight and delay risk equalization and when it eventually appeared that time was running out on their stalling tactics, they sailed off into the sunset with hundreds of millions in profit from the Irish market.

uck51js9zml2yt

Have they a website?

Ogham

tallpaul wrote: »

So now we have : VHI, Laya, Aviva and Glo Health. It will be interesting to see if we get true competition or just the usual facade...

There could be others joining in soon - they all want a slice of the big money when compulsory Universal Health Insurance comes in by 2016..

Caseywhale

whats the point of paying for health insurance if you cannot get faster treatment when the uhi comes in

cookie1977

Caseywhale wrote: »

whats the point of paying for health insurance if you cannot get faster treatment when the uhi comes in

"when"?!?!

Caseywhale

according to the news today 2016

coylemj

One of the principals of UHI is 'free' access to GP care. With everyone covered by insurance, that will effectively mean that GPs will become employees of the state. Don't hold your breath!

NuMarvel

coylemj wrote: »

While I'm all for competition in this health insurance market, the way that Mary Harney allowed BUPA to come into the Irish market and do a 'smash and grab' was an utter disgrace.

What BUPA did was to set up in business here, grab a huge slice of the corporate (especially US companies with young employees) market, make a packet and then flog the business to Quinn when the 'risk equalization' chickens were coming home to roost. They paid millions to lawyers to fight and delay risk equalization and when it eventually appeared that time was running out on their stalling tactics, they sailed off into the sunset with hundreds of millions in profit from the Irish market.

Speaking as a former BUPA employee, I can tell you that wasn't the case. For starters, BUPA's proportion of corporate customers to the overall customer base was the same as VHI's. And I'd interested to see where you got this figure of "hundreds of millions in profit".

cookie1977

NuMarvel wrote: »

Speaking as a former BUPA employee, I can tell you that wasn't the case. For starters, BUPA's proportion of corporate customers to the overall customer base was the same as VHI's. And I'd interested to see where you got this figure of "hundreds of millions in profit".

In fairness BUPA did milk the market by making sure they got young healthy people rather than older clientele. They were then unwilling to go with community rating and risk equalisation. They would probably quite happily of preferred customers to take medicals so they could charge everyone different rates to individuals (ala the USA). They wanted late entry charges of 3% for every year the person was over 35 and hadn't taken insurance. They wanted to apply what ever late entry loadings they deemed commercially necessary to people who upgraded their insurance rather than what we currently have (up to 5 yrs for pre existing conditions).
http://www.hia.ie/assets/files/regulation/Lifetime_Community_Rating/LCR-BUPA-Ireland.pdf

Community rating and risk equalisation were needed to make PMI affordable.

NuMarvel

cookie1977 wrote: »

In fairness BUPA did milk the market by making sure they got young healthy people rather than older clientele. They were then unwilling to go with community rating and risk equalisation.

Nope. BUPA were the only health insurer to actually openly advertise looking for older people. There was adverts in papers and everything. And the issue BUPA had was only ever with risk equalisation. If they had a problem with community rating, they wouldn't have entered the market in the first place.

cookie1977 wrote: »

They would probably quite happily of preferred customers to take medicals so they could charge everyone different rates to individuals (ala the USA).

There's just heresay on your behalf, unless you have proof. I can only say that in my time working there, it was never raised even hypothetically and again, why enter a market where medicals and risk rating are specifically not features.

cookie1977 wrote: »

They wanted late entry charges of 3% for every year the person was over 35 and hadn't taken insurance. They wanted to apply what ever late entry loadings they deemed commercially necessary to people who upgraded their insurance rather than what we currently have (up to 5 yrs for pre existing conditions).
http://www.hia.ie/assets/files/regulation/Lifetime_Community_Rating/LCR-BUPA-Ireland.pdf

It was the Government of the day that first proposed Lifetime Community Rating, of which Late Entry Loadings are a feature. It was supported by the Health Insurance Authority and VHI, as well as BUPA. And even VHI thought that the loadings proposed by the Government were too low: "...the current suggested loadings are not sufficiently large enough and that premiums must be increased in order to meet the claims of people who join late."

The long and the short of it is that BUPA's entry into the market made things much better for VHI customers. VHI had to respond to the competition and had to introduce student rates and cover for alternative therapies, they had to improve their hospital coverage, and they increased benefits for maternity, overseas and out-patient cover. And what's more, worldwide, BUPA is a not for profit organisation. That's not to say it's a charity that's happy to just break even, but it's also not as if there were greedy shareholders somewhere rubbing their grubby little hands at the thought of all those Irish punts and euro.

And to bring us back on topic, that is hopefully what will happen here as well. The current insurers will look at what Glohealth has to offer and improve their offering or reduce their prices if needs be. I haven't had a chance to look at their products yet, but as always, I'll shop around at renewal to see what's on offer and get what I think offers me the best value.

cookie1977

I think the fact that BUPA left the market speaks volumes about what BUPA was primarily focused on.

Glohealths current plans are offering what I'd consider pretty good value. Considering AVIVA have cut a lot out of their plans recently, I'll certainly be considering a switch to them next year.

NuMarvel

cookie1977 wrote: »

I think the fact that BUPA left the market speaks volumes about what BUPA was primarily focused on.

You mean, wanting to operate as viable business? Yeah, that's a shocker.

cookie1977

NuMarvel wrote: »

You mean, wanting to operate as viable business? Yeah, that's a shocker.

other companies seem to be doing well in the Irish market under the same rules that forced BUPA to leave.

él statutorio

cookie1977 wrote: »

other companies seem to be doing well in the Irish market under the same rules that forced BUPA to leave.

Other companies came into the market knowing the rules regarding risk equalization.

BUPA came in and had this risk equalization rubbish foisted upon them by the government of the day. Due, in my opinion, to the constant whinging of the VHI to the government.

cookie1977

Vivas were here at the same time and they stuck it out.

NuMarvel

cookie1977 wrote: »

other companies seem to be doing well in the Irish market under the same rules that forced BUPA to leave.

Assuming you're as knowledgeable as you seem to be, you should know the relevant market rules have changed significantly since BUPA exited the market.

Risk equalisation was struck down by the Supreme Court, and based on what the VHI have been saying, the replacement health insurance levy/age-related tax credit isn't generating as much money for them as risk equalisation would have. So it's a safe assumption that the new system isn't as financially onerous on other insurers as risk equalisation would have been.

CCFROM

I can see an element of truth in all of your points of view. The VHI and the Department of Health never wanted any competition in the Irish Market. BUPA Ireland came in and were not an immediate success (period 1996-199), it was from 2000-2006 that the made a lot of money.This was due to the boom in manufacturing and the property boom that followed. At one point following the introduction of Health Manager BUPA Ireland was making more money than BUPA UK health insurance book. Risk Equalisation was an unfair scheme and the supreme court found in unconstitutional. However BUPA Ireland lost its case in the High Court on all six counts and were facing a massive bill over three years which would have broke the company, hence they left.

On a separate note it will be interesting to see the VHI's position on risk equalisation following the appointment of ex BUPA Ireland's director of operations John O'Dwyer. He was very much against risk equalisation.

cookie1977

I think personally you can't have community rating without risk equalisation. The two in my mind are essential. If I recall correctly BUPA ireland never broke down their earnings for the irish market but as you say it was deemed to be profitable. The problem is health insurance and health care is both costly and difficult to sort. Hence why we're in the rut we're in. How many have dropped their health insurance (and let's be honest it's probably mainly the young) thus adding extra costs on to existing payers. It seems a viscous circle. I do like the idea of health insurance for all. I always like new zealands model (which I think the government have looked at). But while I thought it great many new zealanders didn't. Grass is always greener and such.

NuMarvel

cookie1977 wrote: »

I do like the idea of health insurance for all. I always like new zealands model (which I think the government have looked at). But while I thought it great many new zealanders didn't. Grass is always greener and such.

I like the idea of universal health insurance as well, especially if it means that my combined healthcare contributions are going towards a system that clearly improves health services for everyone. I'm a little trepidatious about some of the specifics of the Government's plan so far (for example, I'm afraid the hospital trusts will just end up becoming health boards by another name), but hopefully we'll see the full plan soon.

coylemj

él statutorio wrote: »

Other companies came into the market knowing the rules regarding risk equalization.

BUPA came in and had this risk equalization rubbish foisted upon them by the government of the day. Due, in my opinion, to the constant whinging of the VHI to the government.

Not quite. BUPA knew about risk equalization long before they entered the market. The reason they came here in the first place is because they got a holiday from risk equalization thanks to Mary Harney rolling out the red carpet for them. Then when the time came to level the playing field and stop them from totally bleeding VHI dry, they dragged the Govt. through the courts to delay risk equalization for as long as possible.

Only when they ran out of road did they show their true colours by packing up and leaving the market. They knew the rules in advance but wanted them to apply to everyone except themselves. As soon as they had to play by the same rules as everyone else, they picked up their ball and went home.

BUPA only started advertising for older people after they devised plans that appealed to younger people. For example, they advertised benefits for laser eye surgery and additional maternity benefits so it was pretty obvious from the start which section of the population they wanted as customers.

And as for the corporate market, they might have had the same penetration as VHI but the businesses they went after and signed up was highly skewed towards companies like Microsoft i.e. companies with younger employees.

NuMarvel

coylemj wrote: »

Not quite. BUPA knew about risk equalization long before they entered the market. The reason they came here in the first place is because they got a holiday from risk equalization thanks to Mary Harney rolling out the red carpet for them. Then when the time came to level the playing field and stop them from totally bleeding VHI dry, they dragged the Govt. through the courts to delay risk equalization for as long as possible.

Only when they ran out of road did they show their true colours by packing up and leaving the market. They knew the rules in advance but wanted them to apply to everyone except themselves. As soon as they had to play by the same rules as everyone else, they picked up their ball and went home.

BUPA only started advertising for older people after they devised plans that appealed to younger people. For example, they advertised benefits for laser eye surgery and additional maternity benefits so it was pretty obvious from the start which section of the population they wanted as customers.

And as for the corporate market, they might have had the same penetration as VHI but the businesses they went after and signed up was highly skewed towards companies like Microsoft i.e. companies with younger employees.

A number of your statements are fundamentally incorrect:

• The Risk Equalisation scheme that BUPA challenged in the courts came into effect in 2003. BUPA entered the market in 1996. There's no way BUPA could have known about something that wouldn't be in place for another 7 years.
  
• VHI was significantly profitable at the time. In the 5 years up to Feb 2007, a few months before BUPA's exit, VHI made a net total of €137 million in profit. They were hardly being bled dry.
  
• BUPA never offered cover for eye laser surgery, so I don't know how they could advertise the benefit. That was VIVAS. And I'm not too sure BUPA ever advertised the additional maternity benefits on a national level. National adverts were usually for brand awareness or new products or new initiatives.
  
• The corporate market itself tends to be skewed towards companies like Microsoft. Or at least, it did at the time, I don't know how it looks now.

bennyob

NuMarvel wrote: »

A number of your statements are fundamentally incorrect:

• The Risk Equalisation scheme that BUPA challenged in the courts came into effect in 2003. BUPA entered the market in 1996. There's no way BUPA could have known about something that wouldn't be in place for another 7 years.

Incorrect. In the health insurance act of 1994, the power was given to the minister of health to enact a risk equalisation scheme. It was written into law a full 2 years before bupa entered the market.

NuMarvel

bennyob wrote: »

Incorrect. In the health insurance act of 1994, the power was given to the minister of health to enact a risk equalisation scheme. It was written into law a full 2 years before bupa entered the market.

The 1994 Act gives the Minister of the day the power to put a risk equalisation scheme in place. The Minister exercised that power in July 2003. So the details of the scheme, such as what costs would be considered, how the calculations would be made and so on, all of those were only signed into law in July 2003, and were based on a White Paper that was published in 2001; 5 years after BUPA entered the market.

bennyob

NuMarvel wrote: »

The 1994 Act gives the Minister of the day the power to put a risk equalisation scheme in place. The Minister exercised that power in July 2003. So the details of the scheme, such as what costs would be considered, how the calculations would be made and so on, all of those were only signed into law in July 2003, and were based on a White Paper that was published in 2001; 5 years after BUPA entered the market.

I agree with you here. I was correcting your point that in 1996, bupa had no way of knowing that risk equalisation scheme, when it was in the legislation that the minister had the power to enact one.