Health Insurance Levy

wicorthered

Can someone explain this health levy to me. I'm 33 now and never had health insurance, to be honest I don't feel I need it yet but am being bullied by the government into getting it to prop up the private health sector! But anyway, do I need to get insurance before May 1st or can I wait until I'm 34 to avoid paying this levy being introduced?

Cheers

Atlantic Dawn

You can wait until your 34. The levy only comes in to play if you take out a policy at age 35 and have never had one before your premium will be an additional 2% for each year 35 and over you age. So with no previous cover if you take a policy out at 35 and regular premium is €500 a year you will pay €510 a year, if you take out a policy aged 55 and the regular premium is €500 a year you will pay €600 a year.

I get the feeling that the 2% figure will rise quickly to keep the overall cost of health insurance for those who do have policies early in life down.

hmmm

wicorthered wrote: »

to be honest I don't feel I need it yet

That's the whole point of insurance - if everyone waited until they needed it, it can't be funded. It needs people paying in when they're younger, as they will be taking out more than they're putting in when they're older.

BoJack Horseman

It's actually a massive disincentive to take up insurance.

I've never had insurance & am in my early 30s.... This won't make me change that.

hmmm

BoJack Horseman wrote: »

It's actually a massive disincentive to take up insurance.

Either more young people take up insurance, or fewer older people - either options works.

BoJack Horseman

hmmm wrote: »

Either more young people take up insurance, or fewer older people - either options works.

Punitively taxing the young won't work first & foremost.

hmmm

BoJack Horseman wrote: »

Punitively taxing the young won't work first & foremost.

Where are you getting that from? Before the age of 35 there is no levy, it only kicks in if you take out insurance from that age on. It's hitting the older person taking out insurance much harder.

It's not a tax anyway, it's (for once) a genuine lexy. Younger people who don't pay in to health insurance get disproportionate benefit if they wait until they are older to subscribe. It's the young person who has paid for insurance from an early age who loses out at present.

I remember reading somewhere that there is a crossover point in the early 40s where the benefits of health insurance exceed the costs, so if everyone waited until then the system cannot be funded.

ART6

Is there a point being missed here? The health insurance premium is not a "levy", but the government introduced a levy on all private health insurance in 2009. It amounts to €160 per adult and €53 per child, paid by the insurers to the government. Therefore, a family of two adults and two children will be paying €426 per year in this levy. Perhaps that is why the coalition is so anxious for more people to take up private health insurance? One could, perhaps, argue that is yet another stealth tax that, hopefully, might escape public notice?

nice_guy80

I thought the health system was funded from our taxes.

why should we need private health insurance

Head The Wall

It's funny how with health insurance and risk equalisation they want to force the young to pay so there will be enough funds for old people's health insurance.

With motor insurance there's no risk equalisation so again the young get sh1t on again with excessive charges.

Seems like if you're young you get a raw deal where insurance is concerned in Ireland

_Kaiser_

Don't have (and never had) health insurance and certainly won't be paying even more for it now (which is why I don't have it in the first place). I'm 40 this year.

gaiscioch

As somebody who will now have to take out health insurance, my outstanding query which no media report is answering is this:

As the government is penalising people who don't take out health insurance before 1 May, does this government policy essentially mean there will be a substantial increase in demand for health insurance and this will thus lead to an increase in the price of health insurance? Or, has this government included some safeguards to prevent profiteering by private health insurance companies (a profiteering which would not be possible but for this government's interference in the free market)?

Thank you in advance to anybody who will clarify this situation.

hmmm

gaiscioch wrote: »

this will thus lead to an increase in the price of health insurance

There's no evidence it will do this. There seems to be pretty good competition in this market at present. Prices have been increasing because of the costs that government run hospitals were loading onto private insurance subscribers.

Sheldons Brain

gaiscioch wrote: »

As somebody who will now have to take out health insurance, my outstanding query which no media report is answering is this:

As the government is penalising people who don't take out health insurance before 1 May, does this government policy essentially mean there will be a substantial increase in demand for health insurance and this will thus lead to an increase in the price of health insurance? Or, has this government included some safeguards to prevent profiteering by private health insurance companies (a profiteering which would not be possible but for this government's interference in the free market)?

Thank you in advance to anybody who will clarify this situation.

The levy is designed to get younger people to join and so would tend to reduce the price of health insurance. Certainly, new bare bones policies have been introduced which are cheaper than before.

gaiscioch

hmmm wrote: »

There's no evidence it will do this. There seems to be pretty good competition in this market at present. Prices have been increasing because of the costs that government run hospitals were loading onto private insurance subscribers.

Sheldons Brain wrote: »

The levy is designed to get younger people to join and so would tend to reduce the price of health insurance. Certainly, new bare bones policies have been introduced which are cheaper than before.

But an increase in demand, as far as I'm aware, generally leads to an increase in price while a decrease in demand generally leads to suppliers reducing prices to attract business. Why would this not happen in the event of increased demand in the health insurance market?

annaP79

it is so annoying! we pay taxes, prsi, USC, water charges, property tax, the list gets longer and longer with all the taxes we pay and now we are told we must take out health insurance ??
what?
where is all the money we are paying going now?
seriously, who earns enough to cover for all that, everything goes up! rents in dublin are crazy! transport very expensive and now this?
and it would be good to start putting sth aside for pension too in your 30ties!

why then gov doesnt reduce tax to flat 15% or whatever , no prsi, no USC and let people take everything privately, at least then we would have money to do that, not to worry that better off would pay less, they can afford tax advisers who tell them how to avoid taxes already so at least average person could have more in her pocket at the end of the month

i am annoyed and worried
and i dnt have children, i have no idea how people with kids manage

and yes, the hope is that insurance premiums will go down as more people sign on...right!...do you seriously believe that private insurers will do that? i dnt think so

hmmm

gaiscioch wrote: »

But an increase in demand, as far as I'm aware, generally leads to an increase in price while a decrease in demand generally leads to suppliers reducing prices to attract business. Why would this not happen in the event of increased demand in the health insurance market?

An increase in demand for a product in limited supply will lead to an increase in price, but private healthcare isn't in limited supply. The more demand there is, the more places there will be, the more doctors will service it.

I'm not saying it won't happen, but it wouldn't make sense to me why it would happen when there is proper competition.

titan18

ART6 wrote: »

Is there a point being missed here? The health insurance premium is not a "levy", but the government introduced a levy on all private health insurance in 2009. It amounts to €160 per adult and €53 per child, paid by the insurers to the government. Therefore, a family of two adults and two children will be paying €426 per year in this levy. Perhaps that is why the coalition is so anxious for more people to take up private health insurance? One could, perhaps, argue that is yet another stealth tax that, hopefully, might escape public notice?

OP seems to be on about LCR, not the Health Insurance Levy.

hmmm

annaP79 wrote: »

it is so annoying! we pay taxes, prsi, USC, water charges, property tax, the list gets longer and longer with all the taxes we pay and now we are told we must take out health insurance ??

No-one is forcing you to take out private insurance, but what the levy is doing is making it more expensive for you to wait until you are older and more likely to get sick to take it out.

The current situation is hugely unfair on younger people who do take out insurance, as they end up paying more than they need to. The levy will help correct that.

nice_guy80

I wonder has anyone challenged this Community Rating in the courts?

Sheldons Brain

gaiscioch wrote: »

But an increase in demand, as far as I'm aware, generally leads to an increase in price while a decrease in demand generally leads to suppliers reducing prices to attract business. Why would this not happen in the event of increased demand in the health insurance market?

An increase in this demand, which can be met more cheaply than the present demand, can reduce prices.

annaP79

i think that the older you get the higher premium you pay anyway so this is how older people taking up insurance are "penalised " already, no gov levy is needed to correct the situation
and there is so much waste and bad management going on in the health service anyway that not extra money in but better control of whats already there is needed to improve anything
levy is another gov gimmick to show they care when in fact they haven't got a clue what they are up to

Sheldons Brain

annaP79 wrote: »

i think that the older you get the higher premium you pay anyway so this is how older people taking up insurance are "penalised " already, no gov levy is needed to correct the situation

I suspect you aren't very well informed.

FreudianSlippers

BoJack Horseman wrote: »

It's actually a massive disincentive to take up insurance.

I've never had insurance & am in my early 30s.... This won't make me change that.

I had insurance and dropped it, less than a year later I had to have surgery and the cost was so low that it made me regret ever having insurance (like it was less than 1 year premium). I'm also in my early 30s and I will certainly wait until I'm 34 to get insurance (which isn't that soon :mad: ).

FreudianSlippers

nice_guy80 wrote: »

I thought the health system was funded from our taxes.

why should we need private health insurance

Where were the "we already pay" brigade when they were discussing universal health insurance? Unlike water, this was actually going to be paying twice.

Geuze

nice_guy80 wrote: »

I thought the health system was funded from our taxes.

why should we need private health insurance

It is.

That is a good question.

There are incentives in the system which mean that consultants and hosps want to keep private practice as they earn huge income from it.

So there are vested interests who want the two-tier system to stay.

nice_guy80

It is a bit of a joke of a system

Just seems to me to be propping up the cosseted medical profession in Ireland.
I mean, most consultants are going to know that most people will have health insurance and will charge accordingly.
same with those who provide MRI services and private hospitals.

What ever happened to the Troika suggestion in the bailout programme to open up the medical, law and other professions to more competition and free market rules?

It is a bit of a silly thing to implement just as the economy is turning around and people have a bit of extra €€€€ in their pockets

FreudianSlippers

nice_guy80 wrote: »

It is a bit of a joke of a system

Just seems to me to be propping up the cosseted medical profession in Ireland.
I mean, most consultants are going to know that most people will have health insurance and will charge accordingly.
same with those who provide MRI services and private hospitals.

What ever happened to the Troika suggestion in the bailout programme to open up the medical, law and other professions to more competition and free market rules?

It is a bit of a silly thing to implement just as the economy is turning around and people have a bit of extra €€€€ in their pockets

The government has totally ****ed up the Legal Services Regulation Bill; firstly by taking 4+ years to implement it and secondly by removing the aspect of allowing barristers/solicitors to form partnerships and allowing barristers to work in-house without disbarring themselves.

Another fine FG/Lab mess. In terms of medicine, I don't think consultants are to blame on this tbh.

sarumite

gaiscioch wrote: »

But an increase in demand, as far as I'm aware, generally leads to an increase in price while a decrease in demand generally leads to suppliers reducing prices to attract business. Why would this not happen in the event of increased demand in the health insurance market?

Thats not really true. Its generally more expensive to buy bespoke products that are low in demand than to buy high demand product that can therefore be massed produced. Unless there is a supply shortage, an increase in demand will often lead to lowering of prices. In respect to insurance, the more people you have that are willing to come together and share the risk between them, it makes sense that the cost of providing insurance goes down. That however, assumes a standard distribution of the participants within the pool which we currently do not have and which this levy hopes to address.

Icepick

annaP79 wrote: »

it is so annoying! we pay taxes, prsi, USC, water charges, property tax, the list gets longer and longer with all the taxes we pay and now we are told we must take out health insurance ??
what?
where is all the money we are paying going now?
seriously, who earns enough to cover for all that

Unless you are earning like 50k+, you are actually not paying that much in taxes.
Compared with how large the budget is anyway.

titan18

sarumite wrote: »

Thats not really true. Its generally more expensive to buy bespoke products that are low in demand than to buy high demand product that can therefore be massed produced. Unless there is a supply shortage, an increase in demand will often lead to lowering of prices. In respect to insurance, the more people you have that are willing to come together and share the risk between them, it makes sense that the cost of providing insurance goes down. That however, assumes a standard distribution of the participants within the pool which we currently do not have and which this levy hopes to address.

I fail to see how it addresses it tbh. It's saying that you don't need health insurance until you're 35 really, and for anyone over that age to get it now or be priced out of the market forever. If anything I'd imagine it'll just lead to an influx of older people before May rather than it doing anything for younger generation.

johnnyskeleton

FreudianSlippers wrote: »

I had insurance and dropped it, less than a year later I had to have surgery and the cost was so low that it made me regret ever having insurance (like it was less than 1 year premium). I'm also in my early 30s and I will certainly wait until I'm 34 to get insurance (which isn't that soon :mad: ).

Ive been wondering about that myself. The four areas of healh services in my view are:
1. Rouine GP/denIst visit;
2. Elective surgery;
3. Emergency room visit;
4. Serious illness.

Private health insurance does not cover 1-3 so you have to pay for these things yourself (with the state paying most of the emergency room cost). For serious illness you will get the same treatment but without the bells and whistles of a private room etc. If a private patient was prioritised for a transplant/chemo over a public one, there would be war. Plus, if you are in that position your primary concern is to get treated.

Are private maternity services covered by VHI? I can see how this could make financial sense.

Sheldons Brain

johnnyskeleton wrote: »

Ive been wondering about that myself. The four areas of healh services in my view are:
1. Rouine GP/denIst visit;
2. Elective surgery;
3. Emergency room visit;
4. Serious illness.

Private health insurance does not cover 1-3 so you have to pay for these things yourself (with the state paying most of the emergency room cost). For serious illness you will get the same treatment but without the bells and whistles of a private room etc. If a private patient was prioritised for a transplant/chemo over a public one, there would be war. Plus, if you are in that position your primary concern is to get treated.

Private health insurance can some types of elective surgery.
With serious illness it may get you diagnosed more quickly, no waiting for scans etc. This could be really important.

But the private insurance is most valuable for something that makes you very uncomfortable, but won't kill you, as there can be long long public waiting lists for these things.

Are private maternity services covered by VHI? I can see how this could make financial sense.

Policies have this, even if you are a man.

Geuze

johnnyskeleton wrote: »

Ive been wondering about that myself. The four areas of healh services in my view are:
1. Rouine GP/denIst visit;
2. Elective surgery;
3. Emergency room visit;
4. Serious illness.

Private health insurance does not cover 1-3 so you have to pay for these things yourself (with the state paying most of the emergency room cost). For serious illness you will get the same treatment but without the bells and whistles of a private room etc. If a private patient was prioritised for a transplant/chemo over a public one, there would be war. Plus, if you are in that position your primary concern is to get treated.

Private health insurance does cover no. 2, sure that's why most people buy it.

micosoft

nice_guy80 wrote: »

I thought the health system was funded from our taxes.

why should we need private health insurance

Our taxes aren't enough to cover the demand/speed of service many people insist on. If you've not seen the news you will see huge funding issues in our health service. TBH it exists in every public health service out there.

micosoft

annaP79 wrote: »

why then gov doesnt reduce tax to flat 15% or whatever , no prsi, no USC and let people take everything privately, at least then we would have money to do that, not to worry that better off would pay less, they can afford tax advisers who tell them how to avoid taxes already so at least average person could have more in her pocket at the end of the month

Can you let us know when you discover this fantasy country?
Even the Americans pay lots of different taxes - even more then we do - Federal and State tax for example.

Also most of these taxes go towards funding health and social welfare. Would you rather worry less about the number of taxes you pay but worry that if you were to lose your job/become permanently incapacitated that you would get nothing from the state.

Finally, honestly what's the difference between paying many taxes or paying many private companies for services (leaving aside the discussion on quality/efficiency). Sure I pay my Gas and Electricity together more so I don't have to deal with two suppliers then anything else. You solution does not make it any cheaper or simplar.

FreudianSlippers

micosoft wrote: »

Even the Americans pay lots of different taxes - even more then we do - Federal and State tax for example.

More in number, but less in percentage (for most).

micosoft

gaiscioch wrote: »

As somebody who will now have to take out health insurance, my outstanding query which no media report is answering is this:

As the government is penalising people who don't take out health insurance before 1 May, does this government policy essentially mean there will be a substantial increase in demand for health insurance and this will thus lead to an increase in the price of health insurance? Or, has this government included some safeguards to prevent profiteering by private health insurance companies (a profiteering which would not be possible but for this government's interference in the free market)?

Thank you in advance to anybody who will clarify this situation.

Firstly a correction - the Irish Health Insurance market is absolutely NOT a free market. It is heavily regulated and community rating is the intervention that is being fixed by this charge. This was a protection to prevent insurance companies raising their rates on subscribers who became sick (a bit like loading a car driver after an accident) - but obviously this is seen as unfair as nobody chooses to be sick as opposed to being a bad driver. In most open insurance markets like the US you would be massively penalised for taking out insurance in your thirties.

Secondly WRT profiteering you need to understand how the insurance market works. Very rarely would insurance companies seek to profit on the premiums they derive from the subscribers. Essentially premiums in, premiums out.

The first principle of insurance is that subscribers are pooling their risk equally. If they are not, then they need to pay a premium.
People in their twenties rarely get sick (and when they do it's typically an force trauma so end up in emergency treatment).
From thirties on they have children which is the first significant elective demand on their health care.
The situation gets ever worse as people get older after that.

Where do insurance companies make their money you ask? Well they invest the premia - usually in low risk investments, and make their profit from the return on investment. The reason insurance costs rose dramatically (if apparently counter-intuitively) during the recession was that the return on their investments collapsed. This meant not only were they not making a profit but they were making a loss which was eating into their reserves. Many insurance firms have large reserves in case an event goes against them (e.g. a hurricane). In that scenario they need enough reserves to respond.

As an aside most insurance companies because they are safe investments tend to be owned by Pension companies. Large chance the pension you have is funded by the profits you are slamming. I find it so odd people don't grasp the relationship between their pension and the performance of private sector companies.

I think charging a stepped series of rate increases as you get older is a fair way of doing it. Put it this way - basically instead of paying for health insurance when you can get away with it during your twenties, you are storing up a charge for later in your life. It's your decision what way you go but it's not unfair.

nice_guy80

Suddenly jobs that provide health insurance look very attractive. Mainly private sector management

Whereas most of those in public sector have to fund their own private healthcare.

I'm seriously considering not opting for the health insurance. I've never needed it up until now, I'm perfectly fit and healthy. I don't agree with this % penalty if I in the future decide to take out a policy.

Greyian

nice_guy80 wrote: »

I'm seriously considering not opting for the health insurance. I've never needed it up until now, I'm perfectly fit and healthy. I don't agree with this % penalty if I in the future decide to take out a policy.

So, you should just be able to take out insurance once you need it?
That would be great. Never pay for insurance, then get an illness that will cost €10,000s to treat, get insurance for ~€100/month, then cancel it once you're better. Who cares if all the insurance companies go bust as a result.

Sure, why don't we just require people to get car insurance after they have an accident?

FreudianSlippers

Greyian wrote: »

So, you should just be able to take out insurance once you need it?
That would be great. Never pay for insurance, then get an illness that will cost €10,000s to treat, get insurance for ~€100/month, then cancel it once you're better. Who cares if all the insurance companies go bust as a result.

Sure, why don't we just require people to get car insurance after they have an accident?

Was it Chris Rock that suggested we change the name to "in case **** happens"?

nice_guy80

Greyian wrote: »

So, you should just be able to take out insurance once you need it?
That would be great. Never pay for insurance, then get an illness that will cost €10,000s to treat, get insurance for ~€100/month, then cancel it once you're better. Who cares if all the insurance companies go bust as a result.

Sure, why don't we just require people to get car insurance after they have an accident?

it is not the same comparison
If I was to get cancer, the public health system will see me, and is quite successful too

If I was female and was pregnant, I could go the public health route to have my baby.

I believe in one health system for everyone.
Not a two tier system for those who can afford it or are lucky enough to have an employer footing the health insurance scheme.

Hopefully my earnings will be better in years to come and I will take out health insurance

Geraldo

Where do insurance companies make their money you ask? Well they invest the premia - usually in low risk investments, and make their profit from the return on investment. The reason insurance costs rose dramatically (if apparently counter-intuitively) during the recession was that the return on their investments collapsed. This meant not only were they not making a profit but they were making a loss which was eating into their reserves.


This isn't exactly true of health insurance, more in line with the GI business. The money is invested in short-term deposits that never provided much ROI. They did fall for sure but investment income would never have been a main source of income really. The real problem was the fact that lives on risk fell off a cliff and most of the people leaving the market tended to be young people who couldn't afford it any longer. Problem was that these people were also the healthiest and were propping up the whole market. That's the whole point of lifetime community rating. Get the young people back on cover by hook or by crook.

Geraldo

Geraldo wrote: »

Where do insurance companies make their money you ask? Well they invest the premia - usually in low risk investments, and make their profit from the return on investment. The reason insurance costs rose dramatically (if apparently counter-intuitively) during the recession was that the return on their investments collapsed. This meant not only were they not making a profit but they were making a loss which was eating into their reserves.


This isn't exactly true of health insurance, more in line with the GI business. The money is invested in short-term deposits that never provided much ROI. They did fall for sure but investment income would never have been a main source of income really. The real problem was the fact that lives on risk fell off a cliff and most of the people leaving the market tended to be young people who couldn't afford it any longer. Problem was that these people were also the healthiest and were propping up the whole market. That's the whole point of lifetime community rating. Get the young people back on cover by hook or by crook.

Quoting micosoft here btw

Head The Wall

Greyian wrote: »

So, you should just be able to take out insurance once you need it?
That would be great. Never pay for insurance, then get an illness that will cost €10,000s to treat, get insurance for ~€100/month, then cancel it once you're better. Who cares if all the insurance companies go bust as a result.

Sure, why don't we just require people to get car insurance after they have an accident?

No that's not how it works, when you start paying for health insurance where you can't claim anything and any known health conditions will not be covered so you can't just buy it when you need it.

Can you buy motor insurance after a crash? No

WicklowTiger

It's going to be interesting to see how our health services (public and private) cope with all of the new entrants into the private health insurance market in the coming months.

I've yet to hear any discussion on this topic. All of a sudden an extra what, 100,000 or 200,000 people have cover that they expect will let them "skip the queue". OK they're not all going to get sick at once, but you have to wonder.

nice_guy80

WicklowTiger wrote: »

It's going to be interesting to see how our health services (public and private) cope with all of the new entrants into the private health insurance market in the coming months.

I've yet to hear any discussion on this topic. All of a sudden an extra what, 100,000 or 200,000 people have cover that they expect will let them "skip the queue". OK they're not all going to get sick at once, but you have to wonder.

it will push up salaries for consultants as they all turn to private work over public work

Geuze

WicklowTiger wrote: »

It's going to be interesting to see how our health services (public and private) cope with all of the new entrants into the private health insurance market in the coming months.

I've yet to hear any discussion on this topic. All of a sudden an extra what, 100,000 or 200,000 people have cover that they expect will let them "skip the queue". OK they're not all going to get sick at once, but you have to wonder.

Note that thousands of people dropped cover during the Great Recession, so more signing up during 2015 may still mean less with insurance compared to 2007.

WicklowTiger

Geuze wrote: »

Note that thousands of people dropped cover during the Great Recession, so more signing up during 2015 may still mean less with insurance compared to 2007.

Maybe so but don't forget capacity in the system has also reduced in this time period

Dannyboy83

FreudianSlippers wrote: »

Was it Chris Rock that suggested we change the name to "in case **** happens"?

I haven't been able to find the article since I read it on this forum a few years ago, but it documented the case of a woman who was diagnosed with cancer at the same time as an unrelated man.

It compared the treatment they received and the speed.
He was already finished a round of treatment, while she was still waiting to see a specialist.

It concluded she probably would have lived, (as he did), if she had not been hostage to the inadequacy of the public health system.

My partner think it's a waste and refuses to pay it, so I pay it on her behalf despite her objections.
While it does seem to be useless in many situations in Ireland, in the cases where it matters, it seems it's critical.

I would urge anyone considering abandoning their health insurance to read it (it someone can find it). It really was an eye opener for me.

Villa05

micosoft wrote:

Our taxes aren't enough to cover the demand/speed of service many people insist on. If you've not seen the news you will see huge funding issues in our health service. TBH it exists in every public health service out there.

Correction Our taxes are not enough to cover the waste in the health service. Per capita we have one of the best funded services in Europe even after the cuts. The problem is we are not getting value for money. Surprise surprise