More switchers than leavers in the private health insurance market
See here for my column from Medical Independent on survey carried out on health insurance from 15 May 2014There is much noise and scaremongering about the high numbers of people fleeing the private health insurance market. In fact, one of the interesting trends of the boom is the stability of the quantity of people who have kept their private health insurance, despite massive increases in what people have to pay for their insurance.
The most recent Health Insurance Authority (HIA) figures show over 2,052,000 million people had private health insurance in December 2013, just under a quarter of a million fewer than when numbers were at their highest in December 2008. What these figures do not show us is how many of the two million-plus people with health insurance have switched down to a cheaper package, which inevitably has less cover.
It is no surprise that many people have switched. HIA data also shows how the cost of claims doubled between 2006 and 2012. Most people with insurance premia have experienced at least a doubling of the cost of insurance during this time, with some schemes hit harder than others.
These figures also show that those exiting are younger people and it is assumed that many of these have emigrated, seeking work abroad. This is a double-whammy for private health insurers as they have fewer, younger people on their books and their older clients are costing much more.
Understanding how many of those with private health insurance have switched down is critical to owners of private hospitals, as some of these hospitals are excluded from ‘cheaper’ health insurance packages.
Private hospitals are taking a hit with fewer patients — both those with and without insurance, who are no longer covered and/or cannot afford to pay privately for treatment. As a result, there is increasing amounts of spare capacity in private hospitals, while public hospitals are operating at over 100 per cent capacity.
Health insurers have these ‘switching’ figures but do not put them in the public domain, as they are ‘commercially sensitive’. It is estimated that there are about half a million switchers, but new figures reveal a potentially higher figure.
The representative body of private hospitals — the Independent Hospitals Association of Ireland (IHAI) — commissioned Red C to survey over 1,000 people to gain a deeper understanding of who holds private health insurance.
Carried out in February 2014, it throws some more light on the market. Of the 1,007 adults surveyed, 524 of them had private health insurance, just about a representative sample for the population.
More women than men have insurance, reflecting the fact that women live longer and not surprisingly, 57 per cent of those with insurance come from higher-income groups. Critically, 70 per cent took out private insurance over 11 years ago or more; 22 per cent have had insurance for over 30 years.
This survey shows that 34 per cent of those with insurance decreased the amount paid, while 25 per cent downgraded their health cover and 11 per cent moved insurer. Unfortunately, it is not evident from the findings how much overlap there is between these three groups but it is reasonable to assume there is considerable overlap, and that most people are switching to get better value, often for more limited coverage. This data indicates significantly more switching than the half a million suggested.
Of those who downgraded their policy, not surprisingly 91 per cent did so because the insurance became too expensive and they could no longer afford it. Critically for private hospitals, 7 per cent plan to cancel their policy while another 30 per cent plan to either downgrade their cover or move insurer.
Survey respondents were asked about their concerns if they did not have private health insurance — 88 per cent were most concerned about the waiting time for care in public hospitals. Again, this is not in the least bit surprising. The biggest gain from having private health insurance in Ireland is that one can fast-track one’s way into both public and private hospitals. Interestingly, faster access to care is the very thing those with private health insurance will lose under Minister Reilly’s plans for Universal Health Insurance.
People with insurance are also concerned about not having access to innovative treatments, to private hospitals and of the quality of care they would receive in a public hospital, if they no longer had private insurance coverage.
This IHAI survey throws a little more light on the private health insurance market. It is a pity we did not have this data pre-bust so that we could look at the impact of the economic crisis on the market and those who buy private health insurance.
Hopefully, it will be carried out again, with some more nuanced questions, to enhance our knowledge over time of this relatively under-researched area. Only by understanding the whole of the health system, both public and private, can we seek to improve and reform it.