Private health insurance

Information

A number of companies offer voluntary private health insurance in Ireland.

The Voluntary Health Insurance Board (VHI) is the largest provider of voluntary private health insurance. It is a statutory body whose board is appointed by the Minister for Health and Children. QUINN-healthcare is the second largest provider of voluntary private health insurance in Ireland. Hibernian Aviva is the third voluntary private health insurance provider to operate in Ireland. There are a number of long-established health insurance providers that deal only with particular groups of employees; membership is confined to employees and retired employees and their dependants. These schemes are known as restricted membership schemes.  Examples include the Gardaí, prison officers and ESB employees. The rules governing health insurance apply equally to all providers with some limited exceptions for the restricted membership schemes.

Using health insurance

Health insurance is used to pay for private care in hospital or from various health professionals in hospitals or in their practices. The arrangements vary from one company to another but most companies have agreements with hospitals that the company will pay the hospital directly. In general, you pay the health professional and then claim from the health insurance company. You should check with your own company as to exactly what procedures they use.

Health Insurance Authority (HIA)

The Health Insurance Authority is the independent statutory regulator for the private health insurance market in Ireland. It monitors the operation of health insurance business in Ireland and advises the Minister for Health and Children in this regard, including assessing the effect of any regulations or new legislation on consumers. The HIA aims to ensure that consumers are aware of their rights; that policies and publicity material describe cover in a fair and comparable way and that community rating, open enrolment and lifetime cover are protected and maintained. The Authority also reviews the appropriateness of the procedures used by insurers in their dealings with consumers.

The Health Insurance Authority has two useful publications; My Rights, My Choices and Selecting a Private Health Insurance Product. You can read them online or request a hard copy.

You can also compare the benefits and prices of different health insurance products with their product comparison tool. 

Risk equalisation

One of the Health Insurance Authority's functions relates to the operation of a Risk Equalisation Scheme. Risk equalisation is a process that aims to equitably neutralise differences in insurers' costs that arise due to variations in the health status of their members. This process is relevant to the customer in so far as it may affect matters such as the operation of community rating or competition between insurers.

The Minister for Health and Children determined that risk equalisation would commence from 1st January 2006, having considered the recommendation and the supporting evidence submitted by the Health Insurance Authority, and having considered subsequent representations submitted by insurers.

Update July 2008

BUPA withdrew from the Irish market in 2006, but its business was later taken over by insurance group Quinn, operating as QUINN-healthcare. Before it left the Irish market, it took a court case against the Irish government, challenging the risk equalisation scheme. The Supreme Court has now ruled that the Government's risk equalisation scheme for health insurance is based on a wrong interpretation of the law and should be set aside.

Register of insurance companies

The Authority maintains the register of insurance companies that are entitled to offer health insurance in Ireland.

Rules

Until 1994, the only health insurance companies offering services in Ireland were the VHI and the restricted membership companies. The European Union 3rd Directive on Non-Life Insurance, which came into effect on 1 July 1994, allowed other companies to offer private health insurance and since then QUINN-healthcare and Hibernian Aviva have entered the Irish market. At the same time, the Health Insurance Act, 1994 was passed, which regulated the health insurance market. The Health Insurance (Amendment) Act 2001 and the Health Insurance (Amendment) Act 2003 also enhance the role of the Health Insurance Authority and provide for the introduction of lifetime community rating.

Regulation of health insurance

All private health insurance providers must be registered with the Health Insurance Authority. Typically, insurers must also satisfy various prudential requirements, which are appropriate to the Financial Regulator - these are requirements that apply generally to all insurance and financial services companies and relate to matters like their financial operation and their investment policies. While VHI is currently exempt from meeting these requirements, it does maintain a significant level of reserves, well above the minimum level required under the relevant EU legislation and is now obliged to reserve so as to attain authorisation by the year 2012.

Minimum level of benefits

At present, companies that are offering cover for in-patient hospital services must offer a minimum level of benefits. They must provide a minimum level of cover in respect of:

• Day care/in-patient treatment
• Hospital out-patient treatment
• Maternity benefits
• Convalescence
• Psychiatric treatment and substance abuse

The minimum accommodation level is semi-private in a public hospital.

Other insurance contracts

Companies are allowed to offer contracts limited to certain health services, e.g., dental and optical services, without being subject to the general requirements about community rating, open enrolment and lifetime cover. They may also offer contracts in relation to GP and out-patient services without having to meet minimum benefit requirements.

Access

There are three general principles that apply to health insurance:

• Open enrolment
• Lifetime cover
• Community rating

Open enrolment

At present, health insurance companies must accept anyone who wishes to join, subject to any applicable waiting periods before cover takes effect, regardless of age, sex or health status - this is known as "open enrolment". Restricted membership schemes must accept everyone who is qualified to join.

Lifetime cover

Once you join and continue to pay your premiums, the insurance company cannot refuse to provide you with cover - this is called "lifetime cover".

An individual or family, having already served both the requisite waiting periods relevant to their age when first taking out private health insurance and any waiting period for a pre-existing condition may switch from one insurer to another, and if such an occurance takes place within 13 weeks, those waiting periods will not have to be served again. Therefore, persons can normally move from one insurer to another without loss of cover.

Community rating

"Community rating" means that the insurance company must charge the same rate for a given level of service, regardless of age, sex or health status. So all adults pay the same amount for the same benefits. Unlike motor insurance or life insurance, matters such as age, sex, sexual orientation, health or past record of claims do not affect the price charged for insurance.

Charges for people aged under 18, people aged 18 to 23 who are in full-time education, retired people who have a special arrangement within their company's health insurance scheme and people in group health insurance schemes may all be lower than the normal adult rate.

Waiting periods

The health insurance company may not refuse to accept you on the basis of your health status but it may restrict the cover it gives you in certain circumstances.

Initial waiting periods

Insurers are entitled to apply an initial waiting period before private health insurance cover becomes effective:

Members of a Restricted Membership Undertaking (excluding ESB), will have to complete new entrant waiting periods when switching to an Open Membership Undertaking, such as Vhi, Hibernian Health or QUINN-healthcare.

Pre-existing conditions

In addition, the health insurance company may refuse to cover you in respect of pre-existing conditions for longer periods after you join. So, for example, if you are have diabetes, the insurance company may refuse to provide you with any cover for diabetes for a specified period but must cover you for any other illnesses once the initial waiting period has expired.

If you are under 55 years of age, pre-existing conditions will not be covered for up to 5 years by your private health insurer even if your condition was diagnosed after you got private health insurance.

Any waiting period for a pre-existing condition may switch from one Irish insurer to another; if the switch takes place within 13 weeks the completed waiting periods will not have to be served again. Therefore, you can normally move from one Irish insurer to another without loss of cover.

How to apply

You must apply directly to the health insurance company that you wish to join. Each company must abide by the general rules described but, after that, they are free to make their own rules. The level of cover available and the rates charged vary from one company to another.

It is a general principle in insurance that you must give all relevant information to the insurance company. If you do not, then the entire contract may be void.

If you are experiencing problems with getting cover, you should contact the Department of Health and Children or the Health Insurance Authority.

Where to apply