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Hibernian
Health to challenge Government health insurance levy in Ireland
__________________________________
18th
December 2008
- Levy on adults and children with private healthcare is
anti-consumer, anti-competitive and unnecessary.
Hibernian Health, the health insurance arm of Hibernian Group,
Ireland's largest insurer, has announced its intention to formally
challenge the Government's anti-consumer and anti-competition
health insurance levy of 160 per adult and 53 per child. The
levy, which was announced without industry or consumer consultation,
leaves Ireland's 2,000,000 health insurance consumers facing
unnecessary increases in the cost of their health insurance.
Hibernian Health has also confirmed that it will refund the
cost of the levy to its customers who may have paid it if the
company is successful in stopping the legislation.
Announcing
its "Axe the levy" campaign (www.axethelevy.com),
Hibernian Health confirmed that it is awaiting publication
of the legislation for the levy and in the interim will do
all it can to have the levy withdrawn. The levy, if implemented,
will make private health insurance unaffordable for many consumers
and companies. The vast majority of the levy collected will
be paid to the VHI, which last year made profits of 112m.
Speaking
today, managing director of Hibernian Health, Jim Dowdall,
said: "Since the levy, which was designed without industry
consultation, was first announced, we have met with the Department
of Health and Children to present our views on why this levy
is not the solution to protect community rating. This levy
significantly reinforces the VHI's market dominance and prevents
real competition and consumers are ultimately paying the price
of higher health insurance costs in a monopolised, inconsistently
regulated market. We would urge people to voice their concerns
and show opposition for the levy by signing the online petition
at www.axethelevy.com."
Hibernian
Health will not pass on the levy disguised as an unwarranted
increase in prices and the company has confirmed that it is
not increasing the prices of its policies. Hibernian Health
has said that it will be forced to collect the levy from policyholders
at their next renewal dates from the 18 January 2009. Hibernian
Health will clearly indicate to customers the levy charge
that must be applied and will hold all payments collected
for this levy in a ring-fenced fund. If Hibernian Health's
challenge is successful in having the levy removed and the
company does not have to pay the levy, Hibernian Health pledges
to refund its customers from whom the levy has been collected.
When
introducing the levy the Government
claimed it, along with increased tax relief for older consumers,
was necessary to protect community rating and the affordability
of health insurance for all. Jim Dowdall of Hibernian Health
says this simply isn't the case. "There is no benefit to older
consumers, or any group of consumers in this levy. We've been
here before with the Department of Health & Children. We need
to see real reform of the industry to introduce fair regulation
and stimulate real competition in a community rated market.
This levy is resulting in all age groups paying higher premiums
by sustaining the VHI monopoly and preventing competitors
from being able to effectively grow market share."
"This
levy is another example of a monopoly protecting quick fix
by the Department of Health. It has been introduced as a three-year
solution but what the industry and consumers need is a longer-term
overhaul of private health insurance, creating a system that
supports a fair deal for consumers and stakeholders in the
health insurance market. We are appealing to consumers to
help us to achieve this goal and are asking all generations
to join together in opposition to this stealth tax on private
health insurance," said Dowdall.
Notes
about this Hibernian Aviva Press Release:
A
company scheme of 200 employees will experience an additional
25,600 tax per annum on top of their health insurance premium.
In the current economic climate this is placing further significant
financial pressure on companies.
The
levy will cost a family of two adults, two children and one
student an additional 383.20 tax on top of their annual Hibernian
Health insurance premium. This will result in health insurance
no longer being affordable for many families.
Family
plan based on two adults two children and a student. All prices
quoted are net of tax relief of source and include a 10% group
discount.
The
government levy is quoted net of tax relief at source at 128
for an adult and 42.40 for a child
All
prices are valid from 18 January 2009 onwards and are correct
at time of going to print December 2008.
The
effect of the levy and tax reliefs on different age bands
is below:
Adult
Levy: 160 gross. 128 net of TRS
Child/Student
Levy: 53 gross. 42.40 net of TRS
- Age
0-17: Tax Credit: Nil; Levy cost = 42.40
- 18-49:
Tax Credit Nil; Levy cost = 128
- 50-59:
Tax Credit 200; Levy cost = 128
- 60-69:
Tax Credit 500; Levy cost = 128
- 70-79:
Tax Credit 950; Levy cost = 128
- 80+
years: Tax Credit 1,175; Levy cost = 128
Government
Health Insurance Levy
A
levy of 160 per insured adult and 53 per insured child up
to the age of 18 will apply to all policies from 18 January
2009 and subsequent years. The charge will accrue to the Exchequer.
Source:
Aviva plc / Hibernian
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