Rise in number and cost of health claims hits VHI results

VHI said it paid a record €1.68bn meeting healthcare bills of members in 2023 – claims were up by 18pc on the previous year. It took in €1.68bn in premiums for its private health insurance business, an increase of 3.2pc on 2022. Income from other products including travel insurance was low – just €29.9m.

The 2023 deficit represents a major swing from a net surplus of €34.3m in 2022. It reflects issues including medical cost inflation and an increase in claims volume since the Covid-19 pandemic – a bounce back after huge numbers of elective procedures were cancelled or postponed and many non-emergency medical cases were deferred during the pandemic.

“In 2023, Ireland experienced a faster than anticipated recovery in demand for healthcare following years of restrictions in access and capacity associated with the pandemic,” VHI said.

VHI raised premiums twice last year and reduced benefits under some plans but the company said the increase in volume and costs of claims was not matched by a corresponding increase in premium income.

A third price hike was announced earlier this year but the financial results suggest further increases could be on the way.

The premium hikes last year had followed net price reductions from 2020 to 2022 as well as refunds during the pandemic totalling around €450m.

Even with a net deficit last year the group had capital reserves of €903m and a solvency capital ratio of 175pc for its insurance business.

State-owned VHI is by far the biggest health insurer in the country with 1.2 million members signed up for private medical insurance and just under 480,000 for other insurance services

Commenting on the results, CEO Brian Walsh said members accessed significantly more healthcare in 2023 than in any other year in VHI’s history and claims accelerated at a rate not experienced before.

“This brought challenges as VHI experienced a financial deficit in 2023. However, VHI welcomes the fact that our health insurance members could access timely and quality healthcare. The unprecedented rise in claims volumes combined with high levels of cost inflation is being addressed through continued focus on efficiency and value for money, aligning pricing with demand for and cost of healthcare, and continuous investment in superior healthcare and technology capability,” he said.