The Health Insurance Market

1. The Health Insurance Market Contributors to Costs and External Factors.

2. The Health Insurance Market

3. Public Health System Cost Drivers • The cost of a private room in a public hospital has doubled since 2005. • The cost of a semi-private room in a public hospital has risen by more than 137% in the same time period. • Increase in cost of “multi occupancy” beds to insured patients: from €80 to €813 per night!

4. Health Insurance Levy • The health insurance levy has increased by 150% since it was introduced in 2009. • The levy is not serving this purpose of community rating but rather, is undermining the entire market that it is supposed to protect. • When the levy is increased, three out of four insurers have no choice but to increase their prices to meet this cost. • The levy, while designed to be neutral, will inevitably and invariably lead to price increases across the market. • Since inception, over 300,000 mostly younger members have been forced out of the market.

5. Potential Cost Drivers Overall we expect a continued upward pressure on health insurance premiums • Medical Inflation Cost Drivers – expected to be small over coming years • Aging in the market – will drive up cost of claims (further impacted by fallout of younger members which we expect to continue) • Tax Relief at Source – potential for further reductions at next budget (impacts net premium paid) • Change to public hospital bed designation will drive up payments to public hospitals • Expect that Health Insurance Levy will continue to increase • Potential reductions in fees paid to private medical consultants • Ongoing negotiation with private hospitals to deliver greater efficiencies may result in some reductions • MFTP policy of Government may change the model for public hospitals – though we do not expect costs to reduce