Hibernian Health, the health insurance arm of Hibernian Group, Ireland's largest insurer, has announced its intention to formally challenge the Government's anti-consumer and anti-competition health insurance levy of €160 per adult and €53 per child.
- Levy on adults and children with private healthcare is anti-consumer, anti-competitive and unnecessary.
Hibernian Health, the health insurance arm of Hibernian Group, Ireland's largest insurer, has announced its intention to formally challenge the Government's anti-consumer and anti-competition health insurance levy of €160 per adult and €53 per child. The levy, which was announced without industry or consumer consultation, leaves Ireland's 2,000,000 health insurance consumers facing unnecessary increases in the cost of their health insurance. Hibernian Health has also confirmed that it will refund the cost of the levy to its customers who may have paid it if the company is successful in stopping the legislation.
Announcing its "Axe the levy" campaign (www.axethelevy.com), Hibernian Health confirmed that it is awaiting publication of the legislation for the levy and in the interim will do all it can to have the levy withdrawn. The levy, if implemented, will make private health insurance unaffordable for many consumers and companies. The vast majority of the levy collected will be paid to the VHI, which last year made profits of €112m.
Speaking today, managing director of Hibernian Health, Jim Dowdall, said: "Since the levy, which was designed without industry consultation, was first announced, we have met with the Department of Health and Children to present our views on why this levy is not the solution to protect community rating. This levy significantly reinforces the VHI's market dominance and prevents real competition and consumers are ultimately paying the price of higher health insurance costs in a monopolised, inconsistently regulated market. We would urge people to voice their concerns and show opposition for the levy by signing the online petition at www.axethelevy.com."
Hibernian Health will not pass on the levy disguised as an unwarranted increase in prices and the company has confirmed that it is not increasing the prices of its policies. Hibernian Health has said that it will be forced to collect the levy from policyholders at their next renewal dates from the 18 January 2009. Hibernian Health will clearly indicate to customers the levy charge that must be applied and will hold all payments collected for this levy in a ring-fenced fund. If Hibernian Health's challenge is successful in having the levy removed and the company does not have to pay the levy, Hibernian Health pledges to refund its customers from whom the levy has been collected.
When introducing the levy the Government claimed it, along with increased tax relief for older consumers, was necessary to protect community rating and the affordability of health insurance for all. Jim Dowdall of Hibernian Health says this simply isn't the case. "There is no benefit to older consumers, or any group of consumers in this levy. We've been here before with the Department of Health & Children. We need to see real reform of the industry to introduce fair regulation and stimulate real competition in a community rated market. This levy is resulting in all age groups paying higher premiums by sustaining the VHI monopoly and preventing competitors from being able to effectively grow market share."
"This levy is another example of a monopoly protecting quick fix by the Department of Health. It has been introduced as a three-year solution but what the industry and consumers need is a longer-term overhaul of private health insurance, creating a system that supports a fair deal for consumers and stakeholders in the health insurance market. We are appealing to consumers to help us to achieve this goal and are asking all generations to join together in opposition to this stealth tax on private health insurance," said Dowdall.
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Notes to editors:
A company scheme of 200 employees will experience an additional €25,600 tax per annum on top of their health insurance premium. In the current economic climate this is placing further significant financial pressure on companies.
The levy will cost a family of two adults, two children and one student an additional €383.20 tax on top of their annual Hibernian Health insurance premium. This will result in health insurance no longer being affordable for many families.
| Plan | Adult Premium | Family Premium * |
| We Plan Level 2 | €589 | €1,799 |
| Health Insurance Levy | €128 | €383.20 |
| We Plan Level 2 incl. levy | €717 | €2,182.20 |
| VHI Plan B Option | €900 | €2,760 |
| Savings | €183 | €577.80 |
Family plan based on two adults two children and a student. All prices quoted are net of tax relief of source and include a 10% group discount.
The government levy is quoted net of tax relief at source at €128 for an adult and €42.40 for a child
All prices are valid from 18 January 2009 onwards and are correct at time of going to print December 2008.
The effect of the levy and tax reliefs on different age bands is below:
Adult Levy: €160 gross. €128 net of TRS
Child/Student Levy: €53 gross. €42.40 net of TRS
- Age 0-17: Tax Credit: Nil; Levy cost = €42.40
- 18-49: Tax Credit Nil; Levy cost = €128
- 50-59: Tax Credit €200; Levy cost = €128
- 60-69: Tax Credit €500; Levy cost = €128
- 70-79: Tax Credit €950; Levy cost = €128
- 80+ years: Tax Credit €1,175; Levy cost = €128
Government Health Insurance Levy
A levy of €160 per insured adult and €53 per insured child up to the age of 18 will apply to all policies from 18 January 2009 and subsequent years.
The charge will accrue to the Exchequer.