How much should you pay for health insurance?

Dermot Goode suggests a €500 entry-level plan will "get you very, very little if you need treatment in a hurry"

How much should you pay for health insurance?

Picture by: Jens Kalaene/DPA/PA Images

With health insurance companies now offering a dizzying amount of plans, it can be a daunting experience choosing the right package.

From entry-level plans to expensive corporate ones, customers can quickly find themselves overwhelmed by numbers and options.

Dermot Goode of TotalHealthCover.ie spoke to Chris Donoghue on Newstalk Drive about the current market situation and what consumers should look for.

"It's still a difficult market," he explained. "Rates are continuing to rise, by double-digit increases. So we're back to the bad old days of where the market was at.

"The market is relatively stagnant in terms of growth. We had 2.3 million members in 2008, just before the crash, and we've been gradually adding 6-7,000 a year. We're back to 2.15 million members. Could you call it a recovery? It's a very slow, incremental - let's just say - recovery - but at least it's going in the right direction."

He said consumers are stuck in a Catch-22 as the public health system is 'on its knees', with 'scary' waiting lists.

"Most people will tell you they don't really want private health insurance, but they have it because they feel they can't rely on the public system.

"The public system, despite the best efforts of everybody working in that system [...] for elective or planned admissions... It's terrible, but if I need an MRI scan I can get it done tomorrow, if I need a colonoscopy I can get it done in two days time with private cover."

He added: "Those without private cover, unfortunately, either have to wait or they have to pay a lot of money themselves to go privately."

"That's not health insurance"

Picture by: Jens Kalaene/DPA/PA Images

It would be easy to suggest having more than two million people on health insurance plans would remove a significant amount of pressure on the public system.

Dermot, however, believes we still have a problem with the number of entry-level plans being purchased.

"An awful lot of people have cover that really is not any good," he told Chris. "They've taken on huge excess, they've taken on co-payments. They've basically reduced the cover down to try and keep some level of insurance in place - but the cover now compared to four or five years ago, there's no comparison.

"Unfortunately - and I have to say this to people to manage expectations - people will say to me 'I have health insurance, I pay €500 a year'. I'm sorry, that's not health insurance. It's an entry-level plan that really will get you very, very little if you need treatment in a hurry.

"The other thing's that's pushing up rates as well as is this practice in public hospitals of charging people with health insurance a rate [that's] ten times the rate they should be charged, simply because they have health insurance."

He suggests that if he was to sign a form to be treated as a private patient, he could end up receiving the same treatment as a public patient in the same room - but the insurance company will be charged almost €900 per night.

He added: "What I would say to every consumer, when that form is put in front of them, you do not have to sign it. You should politely say 'do you have a private room?' I would advise everyone make sure you're in the private room first [before signing the form]."

"I fully appreciate people joining the entry level plans if it's just to get on the ladder to beat the loadings," he observed. "The problem is we have people joining those plans who now think they have fantastic health insurance.

How much should you pay?

Photo: Laura Hutton/RollingNews.ie

The big question then: what kind of plan is good enough?

"If you want reasonable cover, you need to pay €900 per adult," Dermot argued. "If you want really good cover, you need to spend €1,200 per adult - €100 per month. Some people might say that's crazy money - and it is for lots of people. But bear in mind if you go public, you'll be charged €80 per night, up to ten nights in any one year."

Facing a potential annual cost of €800 in the public system, an extra €100 will get you a solid private plan.

Dermot explained: "[That'll] cover you for most public hospitals - in some cases every public hospital - and they'll cover you for most private hospitals up to a semi-private room. A semi-private room could cost you €500 to €1000 per night.

"There's loads of other things. There's maternity cover, psychiatric, convalesence and so forth."

And what about €1,200 plans? Well, to start, it will cover you for every public and private hospital.

"You have cover for major heart surgery in the likes of Blackrock Clinic and the Mater Private," Dermot added. "You have a very small excess to pay when you go into a private hospital, and also you get guaranteed refunds on all your routine expenses.

"If I have any GP, or physiotherapy or consultant fees, I know I'm getting half those costs back at the end of the year from my insurance companies. I don't even wait for the end of the year - I claim as I go."

Dermot also advised people to not automatically renew, as switching companies could make savings for families of between €1,200 to €2,850.

He noted: "It's worth maybe engaging somebody to do it for you, or it's worth simply phoning up your insurance company and asking the right questions."

He also recommended that people visit the Health Insurance Authority's website for more information and comparisons.