Private Health Insurance Flashcards
What does private health insurance cover
Bills from health care
Discuss the creation of VHI
VHI was established in 1957 and required to top 15%of earners in Ireland to pay for health insurance. As a result, they got extra benefits such as being able to skip the queue. Later anybody could join VHI.
What happened with the 3ed non-life directive for insurance?
Forced the government to liberalise the health insurance market and new players such as BUPA and Irish Life joined. It also introduced community rating.
What was act established the HIA
Health Insurance Act 1994
What is the main reason people buy health insurance?
It is faster than the public system
Who is more likely to have health insurance?
Educated people with higher incomes
What are the functions of the HIA?
Provide licences to new providers
Approve new policies
Approve premium raises
Inform consumers
What is open enrollment
Everybody can get health insurance unless they have committed insurance fraud
What are the conditions around pre-existing conditions?
A waiting period, usually 5 years applies before you can get cover for that treatment.
Lifetime cover
You can not be denied insurance in the future because of your claim history.
Does lifetime cover reset when you switch insurers
No
Lifetime community rating
When you join the pool, the loading amount you have when you join is what you pay for the rest of your life.
What is lifetime community rating part of?
intergenerational solidarity
What is the purpose of lifetime community rating?
To encourage younger people to join so they will subsidise the high risk older population.
Risk equalisation
Where other insurers subsidise VHI because of the difference in age of there clients.
How is risk equalisation calculated
A proportion of the market the insurer has
What are the benefits of risk equalisation? (3)
Maintain stability in the market
Confidence in VHI
Restrict other companies from cherry-picking clients.
When risk equalisation was deemed unconstitutional what replaced it?
Health level in 2008
What are non-advanced policies?
Policies that don’t let you skip the queue or go to private clinics
What are the 3 main barriers to entry?
High market share of VHI
Perceived lower profits
Underwriting restrictions that make it harder to compete
Barriers to competition (3)
Psychological cost of moving insurers especially in older people.
Low switching because of VHIs first-mover advantage
Lack of information on different products
