Minister Reilly announces Lifetime Community Rating to boost Private Health Insurance Market
Minister for Health Dr. James Reilly TD, announced today (Monday 7 July 2014) that he has signed into law a new measure, Lifetime Community Rating, to encourage people to take out private health insurance at a younger age, thereby helping to control premium inflation across the health insurance market.
Community rated markets depend on a continuing entry of younger people. Younger people claim less on average and, accordingly, their continuing participation keeps premiums down for everybody. Conversely, if people wait until they are older before taking out private health insurance, premiums will increase for everybody.
The introduction of Lifetime Community Rating, which Minister Reilly has signalled for some time, provides for late entry loadings on the premiums of those who buy health insurance for the first time at the age of 35 years and older.
”This is an important initiative which will support sustainability and competitiveness in the health insurance market. I want to encourage young people into the market at an early age” said the Minister. “At the moment, anyone can wait until quite late in life to join, and enjoy the same community-rated premium paid by people who have had health insurance all their lives. Given the changes to the market profile, this is no longer considered appropriate, and it doesn’t encourage an efficient insurance market.”
There will be a grace period up to 1 May 2015, before which no loadings will apply. After that date, people aged 35 and upwards will be subject to a late entry loading when taking out private health insurance. Existing health insurance customers who continue to retain their cover will not be affected.
The new measure will involve a 2% loading per annum from the age of 35 for those who haven’t joined by 1 May next. Credit will be provided for previous periods of health insurance and for periods of unemployment since the economic downturn in 2008.
- Read a FAQ document on Introduction of Lifetime Community Rating (LCR) to the Private Health Insurance Market here.
- View the Health Insurance Act 1994 (Determination of Relevant Increase under section 7A and Provision of Information under section 7B) Regulations 2014 S.I. No. 312 of 2014 here