If you are taking out health insurance plan for the first time or have allowed your cover to lapse for 13 consecutive weeks or more, you will be covered for accident and injury claims immediately. However an insurer may apply a waiting period to all other claims. The maximum waiting periods that an insurer may apply in these circumstances are as follows:
|Your age when availing of Private Health Insurance||Accident or Injury||New conditions||Pre-existing Conditions||Maternity Benefits|
|<55 years||Immediately||26 weeks||5 years||1 year|
|55-59 years||Immediately||52 weeks||7 years||1 year|
|60-64 years||Immediately||52 weeks||10 years||1 year|
|65+||Immediately||104 weeks||10 years||1 year|
Community Rating is a system, where a person’s age does not determine the level of premium they pay. There are a number of exceptions namely:
- Children, where the premium must be no more than 50% of the adult rate.
- Full time dependent students under the age of 23, where the premiums may be reduced. The reduced premium must not be more than 50% of the adult premium.
- Members of group schemes, where the premium may be reduced by up to 10%.
- Pensioners who are members of restricted membership insurers may have their premiums reduced
Open Enrollment & Lifetime Cover
Under Open Enrolment private health insurers must accept all applicants for insurance cover, regardless of their risk status, age or sex, subject to prescribed waiting periods.
Lifetime Cover protects you by guaranteeing all consumers the right to renew their policies, irrespective of factors such as age, risk status or claims history. Once you have health insurance, an insurer cannot stop cover or refuse to renew your insurance, except in very limited circumstances.
Health insurance claims costs increase with age. The average claims cost in a year for a 75 year old person is currently eleven times that for a 25 year old. At present, VHI Healthcare has a much higher proportion of older lives than Quinn Healthcare or Aviva Health. For instance VHI Healthcare currently (figures from January – June 2010) has 9 times the proportion of members in the over 80 age group than does Aviva Health and 8 times the proportion of Quinn Healthcare. This contributes to VHI Healthcare having a higher average claim cost per member than Aviva Health or Quinn Healthcare.
Risk equalisation is a process that aims to equitably neutralise these differences in insurers’ costs that arise due to variations in the age profile of the insurers. Risk equalisation involves transfer payments between health insurers to spread some of the claims cost of the high-risk older members amongst all the private health insurers in the market in proportion to their market share. In the absence of risk equalisation there is a threat to the existence of a community rated market when significant differences in risk profiles exist between competing insurers.