OVER 40,000 people have cancelled their private health insurance following pay cuts and insurance premium hikes.
Some 2pc of the 2.27m people with health insurance have stopped their payments because of the growing pressure on their incomes, an Oireachtas committee heard yesterday.
That leaves another 40,000 relying on the already-under- pressure public health system.
Younger people account for the highest proportion of those cancelling their insurance, according to Hibernian Aviva Health. It told TDs and senators that 74pc of those who left its company in the last 12 months were under the age of 40.
The number of those forced to cancel their private health insurance coverage is likely to increase “significantly” in 2010, according to managing director Jim Dowdall.
“Against the backdrop of last week’s Budget, where in excess of €1bn in cuts are to be made in the health budget, it is clear that the public system will be less able to cater for the current level of demand placed on it, never mind respond to a significant increase in demand as a result of a reduction in the number of people who will be able to access private health care,” he said.
The largest of the healthcare companies, Vhi Healthcare, told the Oireachtas Committee on Health it will generate losses of over €80m this year in meeting the needs of its customers.
The company has lost almost 120,000 to its competitors, and through cancellations. Yet, it will have more customers over the age of 60 than it did at the start of the year. In 2009, it will have lost €170m in meeting the healthcare needs of customers over the age of 60.
Chief executive of VHI Jimmy Tolan said these level of losses were “unsustainable” in a highly competitive marketplace.
“Our younger customers have to fund the healthcare costs of our older members if they remain with Vhi Healthcare but they do not have to fund these costs if they move to Quinn or Hibernian,” he said. “In 2009, our average healthcare costs per customer will be €900 which is almost double our competitors.”
Donal Clancy of Quinn Healthcare claimed the overall market was “shrinking” as affordability becomes an issue.
The levy on healthcare policies is a “stealth tax that supports the inefficiencies of VHI”, he said.