Expenses are increasing in health insurance and people need to 'make a phone call' to see what better deals are out there.

VHI is raising the cost of its plans by an average of 3.5%, with the increase set to take effect from October 1st.

Laya Healthcare is similarly set to increase premiums by an average of 6.5% from the start of October.

Totalhealthcover.ie Health Insurance Expert Dermot Goode told The Pat Kenny Show all plans are going up in price.

"If there was such a thing as a perfect storm in health insurance we pretty much have it now," he said.

"Effectively all the insurance have gone up or are going up again.

"Laya and VHI have just announced their second increase this year - Laya's average increase will be 6.5%, VHI's will be 3.5%."

Mr Goode said many health insurance plans are also changing their benefits.

"The VHI have already announced certain reductions on plans where you'll get less money back on your outpatient expenses," he said.

"Laya customers will probably have to pay higher excesses from October when they go into hospital.

"Effectively, they're being asked to pay more for slightly reduced cover".

Where can I save?

Mr Goode said, however, families can save if they look carefully.

"Laya Healthcare on the 1st of September are launching a free cover deal - so if you've two or more children under-18 you pay for the eldest and you put the other children on Essential Connect Health [and] that plan will be free for the next year.

"VHI is reducing the children rate on a lot of plans by 25%.

"When I look at the year-on-year for families it might only be 6% but it won't be 20%.

"If you don't shop around you won't get these deals."

'Tell them your budget'

Mr Goode said people need to make just one phone call.

"The goalposts are moving at each renewal," he said.

"The message for every consumer now is even if you only make one phone call to your existing insurer to simply say, 'I can't afford this do you have something that's similar that's less expensive'?

"Tell them your budget - you are not compromising your negotiating position by disclosing [how much you want to spend]".

'Launching new plans'

Mr Goode said while the VHI retired a number of health insurance plans in May they are still creating new ones.

"The VHI had launched another suite of plans which were pretty much replicas of those anyway," he said.

"They're also trying to reduce the numbers of plans because they are over 350 schemes.

"What happens is they reduce the plan numbers but each month they're launching new plans anyway, so one is catching up with the other.

"Irish Life Health have just announced from September 2024 most of their very dated schemes are being removed as well.

"It does mean that there are thousands of customers out there, whether they like it or not, [who] will have to shop around this year".

'Shift' towards private healthcare

Mr Goode said health insurers are blaming an increase in claims for the price hikes.

"It definitely looks like [the increase] is coming from the private hospital sector," he said.

"There seems to be a shift in terms of people's treatment pathways.

"Anecdotally people are telling us they're not going to a public hospital.

"If you go privately you can choose your consultant, choose your accommodation, you can choose when you go in and you're guaranteed to get your private or semi-private room."

'Spiraling' costs

Mr Goode said hospital costs are 'spiraling'.

"I think a lot of people are hearing about waiting times in the public system - but you could argue that is people using the private cover that they're paying for so that's not really a negative," he said.

"The other thing that seems to be coming through is that the actual cost of claims is spiraling".

Mr Goode said the cost of new cancer drugs is also "up 35%".

He said hospitals are turning patients around more quickly with the average length of stays reducing.

"The hospitals are becoming much more efficient in terms of getting people in [and] turn them around more quickly - that's a positive," he said.

"What we're now seeing is the number of claims coming through to the insurance companies for the same insurance period is increasing as well.

"Even the private hospitals are telling us everything that goes into a claim - utilities, cost of labour, cost of drugs, all the equipment - everything is spiralling."

VHI’s latest increase is expected to impact up to 150,000 customers.

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