Health Insurance

“The market now and in the future”

Dermot Goode

- Cornmarket Healthcare Division

- www.healthinsurancesavings.ie

Presentation Overview

Current Market- Competition - Price- Consumer Trends- Product Changes

Looking Ahead- Future for Community Rating- Consumer Challenges- Universal Healthcare- Other Developments

‘Money Saving’ Tips

Health Insurance Landscape

Three Insurers

Level ‘Playing Field’

‘Tax Based’ Risk Equalisation Scheme

New Government Proposals

Affordability Issue

Increasing Cancellations

Cost Drivers – Irish Market

Health Insurance Levies

Public Hospital Charges

Normal ‘Medical Inflation’

Increasing Claims Costs

Ageing Population

Age Profile of ‘Leavers’

Sample Price Analysis

0

200

400

600

800

1000

1200

1400

WL2 / L2H Ess Plus HP Access (Plan B)

Jan-09

Jan-10

Jan-11

Mar-12

Source HIA

Consumer Reaction

Affordability is their biggest issue

Split Cover / Dependent Deletions / Downgrades

2.163 million insured (47.2% compared to high of 52%)

66,000 cancellations during 2011

106,000 now have cash plans only

Membership Statistics (HIA)

0

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010 2011

Total Insured Persons (000's)

Total Income (€m)

50.9% 51.2% 51.7% 50.6% 49.8% 47.2%

Health Insurance Products

Over 200 plans

Confusing terminology

Special offers & 30 day pricing

Product tweaks almost weekly

Increasing role of the ‘Advisor’

Financial Services Ombudsman

Changing Terms & Conditions

Annual contracts

Restricted illnesses

Upgrade rules

Credit for previous membership

Consumers must read the ‘Small Print’

Looking Ahead

Possible new entrant

Higher costs for consumers

More consumers exiting health insurance

More product complexity

Risk equalisation – new scheme

Re-designation of private beds – public hospitals

Community Rating – Sustainable ?

CR model needs a steady stream of younger members

Present system is ‘creaking’- younger ‘healthy lives’ are the ones exiting the system

Some form or Risk Equalisation is needed – risks !!

Minimum Benefits – reform needed ?

Need to progress Universal Health Insurance

Consumer Challenges

Affordability

Higher premiums for reduced cover

Making ‘like for like’ comparisons

Covered for public hospitals only

More may have to seek advice

Impact on corporate clients

Universal Health Insurance (UHI) - Points worth noting…

Health insurance compulsory for all

Consumers can opt for higher cover

Hospital performance statistics

More insurers to choose from

How will it be funded

Proper Risk Equalisation required

Implementation lead time

Other Developments ??

Lifetime Community Rating

Higher Excesses

Managed Care Model

More Restricted Illnesses

Cover for Selected Public Hospitals

Want to save money….

HP Access – Plan B (€1,364) / HP Extra – B Options (€1,644)HP Access – Plan B (€1,364) / HP Extra – B Options (€1,644)

- One Plus Plan (€893)

- PMI 06 11 (€950)

Ess Plus (€1,480) / Ess Plus (with excess) (€1,240)Ess Plus (€1,480) / Ess Plus (with excess) (€1,240)

- Healthwise Plus – no excess (€878)

- Company Care Choice (€974)

Level 2 Hospital (€1,291)Level 2 Hospital (€1,291)

- Level 2 Health Excess (€860)

- Business Plan Select (€951)

More ‘Money-Saving’ Tips

Split cover

Student rates

Corporate plan equivalent

Be sensible with your accommodation cover

Mind those ‘special offers’

Annual review

Any Questions

Cornmarket Group Financial Services Ltd is regulated by The Central Bank of Ireland. A member of Irish Life Group Ltd.