Unsure about insurance

As the last rites are murmured into the Celtic Tiger’s ear, the dying beast might be forgiven for casting a half-closed eye over our shambolic health service and wondering where it all went wrong. Despite Ireland becoming one of the richest countries in Europe, seriously ill people are still to be found sitting for days on hard plastic chairs and lying on trolleys in A&E units waiting desperately for a bed.

Many of the 1.5 million people who pay an average of around €700 each year in health insurance premiums hope that, by virtue of these policies, they will be protected from such miserable and potentially life-threatening indignities. The reality is that health insurance offers absolutely no protection in such circumstances. Once you enter the system through an A&E unit - which is how around 70 per cent of people are admitted - you are placed in whatever type of bed is available, if there is a bed available.

With just 2,500 private or semi-private beds in our public hospitals and more than 600,000 in-patient discharges recorded each year, it is clear there is never going to be enough private accommodation to go around. This shortfall has caused many to wonder just what it is they are spending their money on each year and to ask if there is any real value in an insurance policy which can’t come close to guaranteeing many of the basic things promised in the glossy promotional brochures.

The voices questioning the worth of health insurance are likely to grow louder once the agreement between the HSE and the hospital consultants on new terms and conditions takes effect. One significant element of the new deal will mean that patients with private health insurance will no longer be able to jump the queue for routine diagnostic tests in public hospitals. While this should ensure access is considerably more equitable, it will mean many who are privately insured will wait longer to be seen than is currently the case.

A reader contacted us last week to express his concern about health insurance plans which offer cover for private and semi-private rooms. “I understand the percentage availability of such accommodation is quite low in all our hospitals,” he wrote. Consequently, “the chances of you getting what you have paid for are very low, especially so for emergency hospitalisation.” He questioned whether the policies of any of the insurers offered any value for money and wondered why their plans did not offer refunds or rebates to people who “are compelled to accept less than they were insured for”.

On the Askaboutmoney.com website, a poster, newly resident in this country, asked whether he needed to take out private health insurance. He had heard some of the more shocking stories about A&E queues and delays in having diagnostic tests carried out and was clearly concerned. While views were mixed, most people were of the opinion that most policies were a waste of money, with many asking why, when we pay 6 per cent of our salaries in PRSI, we should then pay an additional sum for what we hope will be better health care.

Even doctors question the need for health insurance. One overseas consultant who has been working in Ireland for several years expressed a degree of mystification as to why so many people automatically sign up for health insurance.

“If you’re very sick you’re probably going to be admitted through A&E and will be given the same standard of care as a public patient irrespective of what level of cover you have,” he says. “And in any event, if I was seriously ill, I’m not sure if I would want to be treated in a private hospital.The level of care provided by the doctors in the public sector is as good, if not better, in many cases.”

The health insurers are, obviously, anxious to reject suggestions that people may be wasting their money. A spokesperson for the VHI told Pricewatch that “by far and away the most compelling reason why people buy private health insurance” is speed of access: generally speaking, the waiting list for private consultants is considerably shorter.

In response, critics could say that if health insurance premiums were paid not to the insurers but into a high-yield savings account, that money could be used to pay in cash any fees associated with urgent diagnostic treatment should the need arise. If you pay €700 a year in health insurance, it will cost you €35,000 over 50 years, money which if invested monthly in an account offering a rate of return of 5 per cent, would more than treble over the same period.

The spokeperson dismissed the idea of giving rebates to people who were treated in public wards despite having cover for private rooms, as did Quinn Healthcare. General manager Colm Morgan said that while a small number of its subscribers complained about not getting the hospital accommodation they were covered for when they were admitted to hospital, most ended up being satisfied. When he was asked about rebates, he insisted that to do so would be in breach of community rating legislation which mandates that everyone pays the same regardless of their age or whether they were treated in a private room or otherwise.

There are, however, some customers of Quinn Healthcare who do not pay the same - those who pay their subscriptions by direct debit. Last month, Quinn, which had made much of its year-long price freeze when it took over Bupa’s business in January 2007, started charging the 50 per cent of its customers who pay by direct debit a 3 per cent surcharge. The move is defended by Morgan, who says it is common in other sectors of the insurance industry.

“What really matters is how our fixed rates compare with the competition. Any of our products are still considerably cheaper than those offered by the VHI. The consumer is free to choose any provider in the marketplace.”

Or indeed to choose none of them.