First entry to health insurance market to become more expensive for over-35s

Health Minister Dr James Reilly

Health Minister James Reilly has signed into law a new measure introducing 'late entry loading' for people who first take out private health insurance after the age of 35.

The measure, entitled 'Lifetime Community Rating', 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.

"Community rated markets depend on a continuing entry of younger people," said a statement issued by the Department of Health and Children.

"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 new measure will involve a 2% loading per annum after the age of 35. Credit will be provided for previous periods of health insurance and for periods of unemployment since the economic downturn in 2008.

A grace period will apply up to May 1, 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.

”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," Minister Reilly said.

“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.”

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