A government-approved increase in the health insurance levy will see premiums rise by around 10 per cent from April 1st, following a decision by the Health Insurance Authority (HIA). The authority says the measure is necessary to maintain what it describes as a fair and inclusive insurance market.
From April, the levy on advanced adult plans will rise by €48, bringing the total charge to €517, while advanced child plans will increase by €16, reaching €172. Advanced plans account for more than 90 per cent of all private health insurance policies in Ireland.
Non-advanced, entry-level plans will also face a similar increase, with levies rising to €103 for adults and €34 for children.
The changes are designed to continue funding the State’s risk equalisation scheme, introduced in 2003 to support insurance equality under Ireland’s “community rating” system, where all customers pay the same premium for the same plan regardless of age or health. Insurers with older or higher-risk customers receive payments from the scheme’s fund.
State-owned VHI remains the largest beneficiary, reflecting its larger share of older and sicker customers.
“Without the REF, older or less healthy consumers could face significantly higher premiums, or insurers might avoid covering them altogether,” said Brian Lee, chief executive of the HIA. “These changes help maintain a fair and inclusive health insurance system for everyone.”
However, the scheme has long been contentious. Rival insurers have periodically objected to the system, most notably UK-based Bupa, which cited risk equalisation as a key factor in its 2006 withdrawal from the Irish market. Its business later evolved into what is now Laya Healthcare.
VHI currently holds 48.3% of the market, followed by Laya at 28.1% and Irish Life Health at 20.3%, according to HIA data. New entrant Level Health, a joint venture between Aviva Ireland and several industry veterans, has captured 0.7% of the market since launching last year. The remaining 2.6% is held by restricted membership schemes.
In total, 2.53 million people in the State—many already dealing with rising premiums—will ultimately bear the cost of the levy increase. The Government is considering a 10-year extension of the risk equalisation scheme when the current EU-approved framework expires in 2027.
