In Ireland, everybody is charged the same premium for a particular health insurance plan, irrespective of their age, gender and the current or likely future state of their health.

This is called community rating.

Community-rated markets depend on a continuing influx of younger people.  Younger people claim less on average and, accordingly, a continuing influx of younger people keeps premiums down for everybody.  Conversely, if people wait until they are older before taking out private health insurance premiums will increase for everybody. 

However, under lifetime community rating, community rating is modified to reflect the age at which a person takes out private health insurance. 

Late entry extra charges are applied to the premiums of those who join the health insurance market at age 35 or over. If you take out private health insurance earlier in life, and retain it, you will pay lower premiums compared to someone who joins when they are older.

The primary purpose of introducing lifetime community rating is to encourage people to purchase health insurance at a younger age. Encouraging more people to join the market at younger ages helps spread the costs of older and less healthy people across the market, helping to support affordable premium levels for all.

Age at entry extra charges will apply on health insurance policies written from the 1 May 2015.

From this date, anyone who takes out private health insurance at age 35 or over, and who do not have qualifying periods of credit, will pay a loading. 

The level of loading will depend on the age at which the person takes out private health insurance. There is a grace period up to 30 April 2015 prior to the introduction of extra charges during which individuals of any age can purchase private health insurance without incurring extra charges. 

Following the expiry of the grace period, the only way to avoid paying late entry extra charges is to take out private health insurance before reaching the age of 35.

From the 1 May 2015, if you are purchasing a private health insurance policy for the first time at age 35 years or older you will pay a 2% loading on top of your premium for every year you are aged over 34. 

For example, if you take out a private health insurance policy for the first time at age 40 you will pay 12% more than someone who took out their cover before the grace period expired.

If you are not sure how this development might affect you, your family or friends or you wish to review your current Private Health Insurance offering please contact Alasdair directly on 01-8101912 or via info@agsfinancial.ie.