VHI to increase premiums by average of 6%
Updated: Wednesday, 30 Jan 2013 23:11
VHI Healthcare has announced that it will increase its prices by an average of 6% from next month.
The price increase will be effective for most plans from the beginning of March.
The company said its most popular plans - One + Plan and One Plan Choice - will see price increases of 4.5%.
VHI said the price increase is driven by a number of factors, including the increasing volume and cost of claims, an ageing membership and an ineffective risk equalisation scheme (RES).
It also said that ongoing medical innovations, which, while welcome, impact on the cost of care.
VHI has warned that the current RES scheme is insufficient to cover the healthcare costs of older customers and must be improved as this represents the biggest challenge for the market.
"We are aware of the enormous financial pressures facing our customers and have sought to keep the price increase as low as possible," said VHI Chief Executive John O'Dwyer.
"We are totally focused on driving down costs in the organisation so that premiums remain affordable and we intend to build on the cost savings achieved to date."
He pointed out that while VHI has 56% market share, it is paying nearly 80% of the country's healthcare claims.
"The vast majority of older and sicker customers in the market are VHI Healthcare customers with 90%+ share of the over 80-year-olds, 80% of the over 70s and 67% of the over 60s,Mr O'Dwyer said.