The announced price hikes could add anything from €50 on a mid level scheme such as One Plus Plan to €260 on their top scheme which is Premium Care, according to Dermot Goode, Head of the Healthcare Division at Lockton Insurance Brokers. 

"Consumers also need to note that this is their second increase this year which means that the cumulative impact for those renewing on or after the 1st of October could be 10 to 15% depending on the plan held," Mr Goode continued.

"The average being quoted by VHI is 3.5% but some of their older plans such as Advanced Care Extra Day-to-Day and Premium Care will increase by approximately 5%."

Speaking on Wednesday, VHI said: "Healthcare costs are rising as more people are accessing much needed healthcare."

"The costs associated with the delivery of healthcare are rising driven primarily by the increased costs in private hospitals and associated healthcare professional costs. The cost of day-to-day claims have also increased significantly."

Reductions to children's premiums

In a move that will slightly mitigate new price increases for some families, VHI said it will reduce the costs of children’s premiums on selected plans by 25% from October 1. In addition, day to day benefits have been added to some plans that previously didn’t have this benefit, the insurer said.

"We have taken the decision to introduce a price increase from October 1 as premium income has not kept pace with healthcare demand and associated claims costs," said Aaron Keogh, managing director of VHI Insurance. 

"We have to price prudently for the future so that we remain in a position to meet the healthcare needs of our members. We understand the affordability challenges that many people are facing and the importance that is placed on retaining health insurance and we are determined to continue to deliver value for money."

VHI reported a loss last year which it said reflected a "challenging environment," with 2023 and 2024 seeing accelerated growth in healthcare claims volumes and as a result, "unprecedented increases" in claims costs. 

"This is because our members are accessing more healthcare than ever before in a variety of settings," Mr Keogh added.

Rising hospital claims

In the first six months of this year, VHI said it saw a 14% increase in private hospital claims compared to the same period in 2023.

The announcement comes just days after VHI's biggest rival, Laya Healthcare announced it would  raise prices by 6.5% for its 700,000 customers, a move that will also take effect on October 1. 

In March this year, VHI hiked average prices by 7% which came on top of two other price hikes in the previous year. 

The Health Insurance Authority (HIA) said it received notice on Wednesday of VHI's proposed price hikes and it encouraged consumers to shop around.

“While we are aware that these price increases may have an impact on some consumers, the health insurance market in Ireland is an open market, and insurance providers can make price changes as they see fit,” it said.

“There have been a number of health insurance price increases across the market in the past 12 months which is attributed to medical inflation and an increase in claims.

“The total level of claims paid by insurers in 2023 rose by 15% on the previous year, and there was a slight increase in claims for private hospitals.”

Mr Goode also warned that further increases in 2024 cannot be ruled out as all health insurer's continue to grapple with the costs of medical inflation. 

"There is a real risk now that many members may be priced out of the market as we approach the peak renewal period.

"Experience shows that when affordability becomes an issue, it is the younger, healthier members who will be forced to exit the market which places further upward pressure on claims costs and therefore results in more increases."