Health insurance provider Vhi has announced a significant increase in prices, which will result in customers paying higher premiums. The price hike, which will take effect from the 1st of October, is the second increase in just six months. Vhi attributed the rise to a “significant” surge in demand for healthcare following the pandemic.
The first price increase earlier this year, which amounted to 4.8%, was estimated to add up to €270 in additional payments for families. With the two increases combined, prices will rise by almost 12%. Aaron Keogh, Managing Director of Vhi Insurance Dac, acknowledged the financial pressures faced by members but stated that the price hike was necessary to meet their healthcare needs.
Keogh explained that the volume of claims had been steadily rising, along with increased costs associated with healthcare delivery. Factors such as upward pressure on wages, energy costs, and other expenses contributed to the need for a price increase. He emphasized that the additional funds would allow Vhi to provide its customers with access to new and innovative drugs, procedures, technologies, and services.
Keogh also highlighted that Vhi’s primary purpose was to meet the healthcare needs of its members. Any surplus generated by the company is reinvested in improving its services. Earlier this year, Vhi reported a net surplus of €34.3m from consolidated business activities, a decrease from €65.3m in 2021. Claims also rose by 10% annually, totaling €1.425bn in 2022. Vhi’s gross written premium for private health insurance reached €1.6bn in the same period.
Vhi operates over 20 healthcare facilities in Cork, including clinics in hospitals, outpatient centers, and diagnostic centers where coverage is provided. The company’s price hike follows similar moves by other insurance providers this year. Irish Life and Laya Healthcare have also increased their premiums.
Laya Healthcare, the second-largest health insurer in the country, announced plans to raise policy costs by an average of 3%, in addition to a 4.4% average rise in premium rates earlier in the year. Similarly, Irish Life implemented two consecutive rate hikes, resulting in premium increases of up to 14%.
These price increases reflect the challenges faced by insurance providers in the healthcare sector. Rising healthcare costs and increased demand for services have put pressure on companies to adjust their pricing structures. While these hikes may cause financial strain for customers, insurance providers argue that they are necessary to ensure the continued provision of quality healthcare services.