Health insurance too complicated and risks overwhelming consumers, watchdog warns

Ireland’s health insurance market has grown too complicated and is overwhelming consumers, working against their best interests and seeing many paying over the odds for cover, the watchdog for the sector has warned.
The Health Insurance Authority (HIA) has said legislative changes may be needed to simplify the market, with its new chief executive Brian Lee committing to taking whatever steps are needed to ensure consumers get the best value for money in the future.
In a new report ahead of a day-long conference looking at options to simplify the health insurance sector, the HIA also noted that adult premiums have climbed by an average of 7 per cent to €1,674 since the beginning of the year.
That price increases are running at more than three times the current rate of general inflation with the hikes rolled out by all the providers likely to cost many Irish households in excess of €500 a year.
In an era of rising prices, there are still savings to be made by shopping around when renewal time comes, the HIA said, but it warned that an ongoing reluctance to switch providers could be costing many of the 2.5 million people with private health insurance.
A total of 71 per cent of the market have never switched provider, the HIA said, while half of those who have switched have only done so once.
Among those who have chosen not to switch health insurance plans, there has been a significant increase in the perception of it being difficult to switch.
With a total of 348 health insurance plans on the market and more coming down the tracks when Irish Life re-enters the market in the months ahead, consumers can feel “overwhelmed” by the number of options, the HIA noted.
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It said it was “aiming to reduce confusion for consumers without harming competition” and wants a “simplification of the market”.
It pointed out that “the current complexity does not benefit any stakeholder in the health insurance industry, least of all the consumer” and urged insurers and policymakers, to collaborate on streamlining the market “to create a more competitive, transparent and consumer-friendly environment”.
Mr Lee said consumers had become “overwhelmed with too many product options and terminology that is difficult to navigate”.
He said the authority was “committed to a future where the health insurance market is simpler, more competitive, and better for consumers”.
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He said the plan was to “collaborate” with the legislators, the Department of Health, the Central Bank, health insurers and policy holders “to help streamline and simplify the market”.
Mr Lee pointed out that in some countries the number of product choices was “restricted by law” while others mandate policies be put into particular categories such as Gold, Silver and Bronze to allow consumers more easily identify those that offer the broadest level of cover.
He suggested legislative changes would be on the table and said the HIA would be working with the Department of Health “in terms of any potential legislative changes… I think we would recognise that that would be needed.”
He added that, in the absence of legal changes, the authority would “also speak to insurers and work in collaboration [to see] if there’s anything we can do on a voluntary basis that could help improve and streamline the market”.
He stressed that there “definitely are opportunities for people to make savings”.
To help people’s understanding, the HIA is in the process of developing an updated comparison tool that will help consumers select the plan that best suits their needs which it is hoping to launch in 2025.