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

This adjustment marks the second rise in prices this year, following a 7% average increase in March.

According to a company statement, the increase is necessary due to the ongoing rise in both the volume and cost of healthcare claims.

Additionally, VHI will implement a 25% reduction in the cost of children’s premiums on selected plans starting in October.

Affordability challenges

Aaron Keogh, Managing Director of VHI Insurance, acknowledged the affordability challenges many people are facing and assured that the company remains committed to delivering value for money.

“We have to price prudently for the future so that we remain in a position to meet the healthcare needs of our members,” he said.

“We understand the affordability challenges that many people are facing and the importance placed on retaining health insurance, and we are determined to continue to deliver value for money.”

Mr Keogh noted that the health insurance company reported financial losses in 2023, reflecting the “challenging environment” in which they are operating.

“In 2023 and 2024, we have seen accelerated growth in healthcare claims volumes and, as a result, unprecedented increases in healthcare claims costs,” he added.

Laya Healthcare has also announced a second rate increase of 6.5% from October 1st, following Irish Life Health's earlier rate hikes in January and July.

Priced out risks

Health insurance expert Dermot Goode warned that there is now a “real risk” that many could be priced out of the market.

“Experience shows that when affordability becomes an issue, it is the younger, healthier members who will be forced to exit the market, which places further upward pressure on claims costs and therefore results in more increases,” he said.

“The message to all consumers now is clear - irrespective of which insurer they’re with or which plan they have - everyone needs to shop around for better value at their next renewal to try and avoid these rate increases.

“All employers who provide company-paid healthcare will also need to shop around for better value for their employees.”

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

Main image: 8/01/2012. Dublin Scenes. Pictured a VHI sign for one of the health insurance companies in dublin. Photo: Sam Boal/Photocall Ireland