I am 33 years old and I do not have private health insurance. I simply never bothered as I felt I would not need it until I am much older. I understand that if I take out private health insurance when I am older it will be much more expensive for me. Is this true? Please explain it to me.
A number of years ago, on May 1 2015, the government introduced Lifetime Community Rating legislation. This community rating provides that everybody is charged the same premium for a particular health insurance plan, irrespective of their age, gender and the current or likely future state of their health. Lifetime Community Rating (LCR ) was introduced, to encourage more young people to take out private health insurance, thereby helping to spread the costs of older and less healthy people across the market.
If you wait until you are 34 years of age or over to take out health insurance, your premium will cost more due to LCR. If you take out private health insurance now, and retain it, you will pay lower premiums compared to someone who joins when they are older.
Under LCR, community rating is modified to reflect the age at which a person takes out private health insurance. Late entry loadings are applied to the premiums of those who join the health insurance market at age 34 or over.
Loadings will apply to all people aged over 34 years taking out inpatient private health insurance for the first time. A loading of 2% of the gross premium will apply for every year of age higher than age 34. This loading will apply for life. The maximum loading that can apply is 70% of the gross premium in the event of a person aged 69 or older purchasing inpatient private health insurance for the first time.
A health insurance cash plan provides monetary benefits for a range of medical events but unlike other private health insurance plans, health insurance cash plans do not provide inpatient cover for costs incurred in hospital as a private patient.
Yes, if you take out inpatient private health insurance after 30 April 2015, your previous periods of cover are taken into account in calculating the loading that will apply to you. Periods of cover held on a health insurance cash plan will not be taken into account for the purposes of calculating loadings.
If you purchase inpatient private health insurance by 30 April 2015 and maintain your cover, you will not have to pay a higher premium. If you only purchase inpatient private health insurance after 30 April 2015 and are aged 35 or over, your insurer will calculate your age at entry under lifetime community rating. This will be your age when you are purchasing insurance less any previous periods of cover (in this example 50 – 5 = 45 ). You will pay the same loading as a 45 year old who is purchasing private health insurance for the first time, i.e. 22%.
This column is prepared by Dolores Gacquin, solicitor. Byrne Carolan Cunningham has offices in Galway, Athlone, Moate, and Lanesboro. A person should always contact their solicitor to obtain legal advice specific to their own situation. This above column contains general advice and cannot be relied upon as legal advice. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
Call Byrne Carolan Cunningham on (090 ) 6478433.
