If you live in Ireland and have recently turned on the TV or radio or have picked up any newspaper, then you will definitely have heard a lot of talk about the Lifetime Community Rating. From the 1st May 2015, anyone who is over 34 years of age and is taking out health insurance for the first time or has had a break of more than 13 weeks from a previous health insurance plan, will have to pay more for health cover due to additional loadings called Lifetime Community Rating loadings. Depending on your age, you will have an extra percentage to pay, and the rating currently stands at 2% for every year over 34 years you are and this goes up to a maximum of 70%. This means that the older you are, the more you will have to pay for health insurance cover.
A Quick Calculation
To illustrate to you how the Lifetime Community Rating will affect you if you are taking out health insurance cover for the first time, here are some quick calculations:
- If you are 52 years old and are taking out your first health insurance cover, you will be subject to an additional 36% loading on top of your premium.
- If you are 39 years old and are taking out your first health insurance cover, you will be subject to an additional 10% loading on top of your premium.
Why has it been introduced?
The Lifetime Community Rating has been introduced in order to encourage younger people to take out health insurance sooner. In recent years, the age profile of those with health insurance has become increasingly older and this has had the effect of a significant increase in health insurance premiums. This has turned many people against taking out health insurance, and this is especially true when it comes to the younger segment of the market.
Concessions
There are some concessions available on the loadings that apply under the Lifetime Community Rating. For example, if you are 45 years of age and previously held health insurance for 5 years, your loading will be reduced by those 5 years. Therefore, your loading will be 12% instead of 22% (11 years less 5 years previous coverage = 6 years x 2%).
A concession will also apply to those who are coming to or returning to Ireland, and a nine-month grace period will apply in both of these scenarios. This means that if you take out health insurance within that nine-month period, you will not have a loading applied. Outside of that period, the Lifetime Community Rating will apply.
Current Health Insurance Holders
The Lifetime Community Rating will not affect those of you who currently have health insurance cover in place prior to 1st May 2015 but, having said this, you must not take a ‘no-cover’ break of more than 13 weeks in the future.
The Lifetime Community Rating will make it more attractive for younger people to take out health insurance cover earlier as they will pay lower premiums than those who choose to take out cover later in life. The result of which we hope will have a positive effect on the health insurance market as a whole.