Ireland: Aviva criticises increase in health insurance levy and calls on the Government to reconsider policy

• Policy continues to artificially and unnecessarily force up the cost of health insurance for 2.3 million consumers.

Aviva has strongly criticised the decision by the Department of Health & Children to increase the health insurance levy from 1 January 2010, to €205 per adult from €185 and to €66 per child from €55.* The increases mean that Ireland’s 2.3 million health insurance customers will continue to pay higher premiums than necessary as a result of these increased subsidies to the VHI.

Vanessa Hartley, customer management and marketing director of Aviva says the company is extremely disappointed that the Department of Health & Children has decided not only to maintain but also to further increase the health insurance levy.

“This levy is exchequer neutral and serves no purpose other than to provide additional finance to the VHI. If this levy was not forced upon us, we would immediately reduce the cost of health insurance by up to 30% on typical plans. Instead, competitors are being required to pay an increased subsidy to shore up the VHI’s inefficient and loss making business (VHI lost €42 million in 2009).”

Vanessa Hartley said: “As a result of this failed policy, health insurance will become unaffordable for many customers and more people are being forced to fall back on an already overburdened public health system. In the interests of all health insurance customers and Ireland’s taxpayers, it is critical that the Government reconsiders this strategy and takes a new approach to ensure affordability of health insurance for all those who decide they require this protection for themselves and their families.”

Aviva has committed to not passing on this increase to its health insurance customers who buy or renew their policy in January 2011, however Aviva will need to review the situation with respect to levy later in the year.

*From 1 January 2011, the following changes will apply:

Health Insurance Levy

• From €185 per insured adult to €205
• From €55 per insured child (under 18 years) to €66.

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