Is choice a good thing for essential services?

[faketales]

I'm currently in the process of renewing my health insurance and trying to understand what is the most suitable plan for me and my family out of the 300 plus plans across 3 providers.

There is no shortage of options but it's not reasonable to expect people to be well enough informed to make fully informed risk based decisions.

It seems to me that modern life expects the average citizen to at least put a converted every into shopping around/ choosing what's best across a number of different somewhat essential services.

Electricity has been a big one in the past two years. Shop around they say, yet you are signing up to a discount not a price! It's less complicated than health that for sure and the outcome for getting it wrong is only financial but to make good decisions you might want to have an idea of who is next to make an announcement of an increase / decrease. I expect it will get more complicated as we move to smart plans. Half the companies we sign up to are just sales companies, they don't even produce electricity.

Add gas to make it more complex again.

I don't find car insurance too bad but I'm guilty of not reading the fine print even though I know all plans are not equal.

Similar with house insurance.

At this point internet may as well be essential. Not that complicated but you need to keep moving to get a decent price.

I'm sure there are a few others people have that I missed.

Are we really benefiting from all this competition? I'm not completely against private. For example you could have private generator companies sell to a state supplier.

The time we are expected to put in to finding what best per year doesn't seem like a great approach. Even if you make good decisions with electricity for example you could still get hit with an increase after a month for example.

Living in Canada, there was only one electricity supplier, gas supplier, car insurer and health insurance wasn't a thing.

Life felt easier and it wasn't generally more expensive.

Do you think the choice is a good thing? Should we keep it but just have a little more regulation around it. Say each health insurance cover need can have max of 5 to 10 plans. Or offer build your own plans.

 

[joer]

I think that choice is a good thing, personally. If there was no choice we would certainly be hammered.
I thought I would never change from electric Ireland but I did to get a better deal. I am with Aviva for years for home and car insurance because I find them very good. I do have a look around when my renewal arrives but always stay with them. I used to be with Sky for TV and Eir for phone , broadband but now I have all with Eir. We are with Laya for a good many years, my wife looks around every year but always stays with them because their plans suits us.
So it is a personal choice really because what suits me might not suit you ..

 

[faketales]

I think that choice is a good thing, personally. If there was no choice we would certainly be hammered.
I thought I would never change from electric Ireland but I did to get a better deal. I am with Aviva for years for home and car insurance because I find them very good. I do have a look around when my renewal arrives but always stay with them. I used to be with Sky for TV and Eir for phone , broadband but now I have all with Eir. We are with Laya for a good many years, my wife looks around every year but always stays with them because their plans suits us.
So it is a personal choice really because what suits me might not suit you ..

I generally jump electric provider regularly, well did when the discounts were good. It just seems a little "unfair" perhaps that people that don't because of not understanding, time, not being able to etc pay the price. Yet even if you do you can get unlucky.

I will say I've been with Liberty for car insurance and usually take a quick look around and don't see much better.

People on here will obviously be more clued in than most on financial issues but I don't feel Irish people are the most financially literate, most don't do a tax return for example. Yet everyday essential services require pretty deep knowledge.

Do I need a health insurance package with the Hermitage hospital for example? I didn't even know it existed this time yesterday morning.

 

[arbitron]

There are strong arguments for privatisation and competition in most aspects of life, but I agree that health is not one of them. There is huge (and growing) information asymmetry between patients as consumers and hospitals/clinicians as service providers.

When you are purchasing health insurance you have to consider the cost of lifetime community rating, your past medical history, family history, your age, family planning, your job, lifestyle, hobbies, travel, and so on. Then you have to look geographically to see which hospitals are covered near you, if there are VHI/Laya urgent care centres close by, etc. You have to understand what a high-tech hospital is, what level of orthopaedic/eye surgery is covered, if you get a private room, whether outpatient fees are refunded, adding children...

Then there are excess/co-pay options which can be per night or per stay. Mental health benefits vary. They all seem to be very generous in their coverage of complete nonsense "alternative therapies" but will exclude other legitimate and necessary treatments. Some of them will cover a particular chemotherapy but others won't. And this all changes like the wind, so even the hospitals and clinicians can't keep up with it.

VHI lists 81 plans, Laya has 121, and Irish Life has 178! The HIA comparison tool is helpful but it's still daunting. I think they are depending on a lot of us getting analysis paralysis and just sticking with our current plan.

I find it very frustrating that we have pensioners on low, fixed incomes who are so (understandably) worried about the level of access and care in the HSE that they pay for private insurance, often on top of a medical card. I have elderly relatives who pay 10-15% of their small pension on a middle-of-the-road VHI plan out of fear they will otherwise be stuck on a trolley or left on a waiting list for basic treatment.

 

[odyssey06]

The thing is if we just had VHI it wouldn't be the VHI we have now. The regulators here immediately suffer industry capture and I have zero confidence that we would have a regulator who actively pushes VHI to act as if it has competitors and to keep prices low \ improve its offering and services.
If we had one supplier of health insurance, car insurance it would be riddled with feather bedding and inefficiencies and the consumer would be zero in its priorities.,

 

[faketales]

There are strong arguments for privatisation and competition in most aspects of life, but I agree that health is not one of them. There is huge (and growing) information asymmetry between patients as consumers and hospitals/clinicians as service providers.

When you are purchasing health insurance you have to consider the cost of lifetime community rating, your past medical history, family history, your age, family planning, your job, lifestyle, hobbies, travel, and so on. Then you have to look geographically to see which hospitals are covered near you, if there are VHI/Laya urgent care centres close by, etc. You have to understand what a high-tech hospital is, what level of orthopaedic/eye surgery is covered, if you get a private room, whether outpatient fees are refunded, adding children...

Then there are excess/co-pay options which can be per night or per stay. Mental health benefits vary. They all seem to be very generous in their coverage of complete nonsense "alternative therapies" but will exclude other legitimate and necessary treatments. Some of them will cover a particular chemotherapy but others won't. And this all changes like the wind, so even the hospitals and clinicians can't keep up with it.

VHI lists 81 plans, Laya has 121, and Irish Life has 178! The HIA comparison tool is helpful but it's still daunting. I think they are depending on a lot of us getting analysis paralysis and just sticking with our current plan.

I find it very frustrating that we have pensioners on low, fixed incomes who are so (understandably) worried about the level of access and care in the HSE that they pay for private insurance, often on top of a medical card. I have elderly relatives who pay 10-15% of their small pension on a middle-of-the-road VHI plan out of fear they will otherwise be stuck on a trolley or left on a waiting list for basic treatment.

That kinda of comparison isn't a million miles from what I do at work, although not health care but that many factors is daunting. To have some confidence in my decision if probably want a few days to get a handle on the what things are what I should look for and then try and analyze over 300 plans that probably don't align easily. You would need all the plan info in some sort of data set starting.

The hia too is very basic, it could ask you to insert x number of gp visits or codes for regular procedures you have.

The problem imo is private health insurance but if you have to work with it could the regulator limit the plans to say 10 per company and have some sort of band they offer them in, public only, private, hi tech. So maybe you have 3 plans in each and 3 companies. More manageable.

Surprised no one offers build your own plans. There probably is a plan out there that has exactly what I want but finding it takes time.

 

[faketales]

The thing is if we just had VHI it wouldn't be the VHI we have now. The regulators here immediately suffer industry capture and I have zero confidence that we would have a regulator who actively pushes VHI to act as if it has competitors and to keep prices low \ improve its offering and services.
If we had one supplier of health insurance, car insurance it would be riddled with feather bedding and inefficiencies and the consumer would be zero in its priorities.,

What about electricity. Do we really benefit from the competition? Maybe I do as I jump around but my parents don't so they lose out.

We now have government intervention in the market because heating/ cooking is essential but it's still fighting with who had a good/ bad price.

I ended up with an extremely high price last year as my contract ran out at the peak. Although I had it good leading up to that.

I'm not against private generation, different companies with different tech all trying to sell to a grid. It just might be better for society if we had one seller imo.

 

[Dr Strangelove]

When deregulation was rolled out in the late 90s it was done on the assumption that consumers would take the time to educate themselves and shop around. I review gas and electricity annually and am pretty confident I am always on the lowest tariff available. But most people don't have the time or effort to do this. Electric Ireland (formerly ESB) and VHI still have >50% market share - indeed 70% of health insurance customers have never switched providers.

I still favour competition for gas and electricity as these are pure commodities. Likewise home and motor insurance are pretty standard products and it's easy to compare.

But I did a health insurance comparison last year and found the process incredibly difficult. There is just so much choice with regard to cover even within the same provider. For example I have to make decisions about what kind of cover I want for a type of cancer I have 1% chance of ever getting.. To make an informed decision you would need to be an actuary and a medic all at once!

The problem imo is private health insurance but if you have to work with it could the regulator limit the plans to say 10 per company and have some sort of band they offer them in, public only, private, hi tech. So maybe you have 3 plans in each and 3 companies. More manageable.

I tend to agree. Something like three to four plans per supplier each within basic parameters. The current number of plans (300 across all providers) is just there to confuse people.

 

[odyssey06]

What about electricity. Do we really benefit from the competition? Maybe I do as I jump around but my parents don't so they lose out.

We now have government intervention in the market because heating/ cooking is essential but it's still fighting with who had a good/ bad price.

I ended up with an extremely high price last year as my contract ran out at the peak. Although I had it good leading up to that.

I'm not against private generation, different companies with different tech all trying to sell to a grid. It just might be better for society if we had one seller imo.

What makes you think without competition you wouldn't just end up with the bad prices... why would you end up with 'good' ones in normal times?

You wouldn't have anywhere to jump around to, and the company would have zero incentive to be offering you good prices.

 

[Leo]

Are we really benefiting from all this competition?

Let's go back to when Aer Lingus was the only option and no one could afford their fares!

 

[faketales]

What makes you think without competition you wouldn't just end up with the bad prices... why would you end up with 'good' ones in normal times?

You wouldn't have anywhere to jump around to, and the company would have zero incentive to be offering you good prices.

The problem I see with the jumping around is that I can't sign up for a set price for x months. My discount is guaranteed but not my base rate. I can sign up and then the supplier can up the prices the next day. That's not how most contracts work.

 

[odyssey06]

The problem I see with the jumping around is that I can't sign up for a set price for x months. My discount is guaranteed but not my base rate. I can sign up and then the supplier can up the prices the next day. That's not how most contracts work.

There are some suppliers who offer fixed base rates such as Flogas, but not all and typically not the previous semi-state monopolies such as EI or Bord Gais iirc.

So not sure how is it a problem with competition that would be addressed by not having any?

 

[Leo]

My discount is guaranteed but not my base rate. I can sign up and then the supplier can up the prices the next day. That's not how most contracts work.

What you're referring to there is hedging where a supplier sets a rate and takes on the risk of prices changing. Of course most weigh the balance of that risk in their favour and the consumer pays more.

 

[thedaddyman]

I was an Ulster Bank customer, if I had the choice I'd go back to them in the morning as their App and Online banking was streets ahead of anything their Irish competitors can offer.

If I'm going to spend 3-5k on health insurance for the family every year, I expect to have to put a little bit of work into it in terms of understanding what I need and don't need. And it's not difficult to be honest to cover off the main point when checking things.

And I will never forget living in London and booking Christmas flights home every January for the following Christmas and paying the equivalent of a modern trans-atlantic flight for it. And then Ryanair came along and changed the game

 

[faketales]

I was an Ulster Bank customer, if I had the choice I'd go back to them in the morning as their App and Online banking was streets ahead of anything their Irish competitors can offer.

If I'm going to spend 3-5k on health insurance for the family every year, I expect to have to put a little bit of work into it in terms of understanding what I need and don't need. And it's not difficult to be honest to cover off the main point when checking things.

And I will never forget living in London and booking Christmas flights home every January for the following Christmas and paying the equivalent of a modern trans-atlantic flight for it. And then Ryanair came along and changed the game

I am certainly not for no competition. Competition works very well in the airline industry.

However you generally know exactly what you are getting when booking a flight. The number of variables is very small. Knowing where the airports are is the biggest one but reasonable for consumers to look up. Even with the airline industry I understand that there were some
legal changes with how they advertised, including taxes etc.

Perhaps a better point might be about for those difficult to assess service they need to be a bit more customer friendly.

 

[Leo]

I am certainly not for no competition. Competition works very well in the airline industry.

It reduced health insurance costs as well. In terms of confusion on the number of plans available, just look at the ones the providers are actively advertising, and use the HIA site to find and compare suitable plans. The reason there are so many plans available is so that the providers can charge people who just renew on their existing plan more. Each year or so they launch new plans that offer the same cover for less than the old plan.

 

[Dr Strangelove]

What you're referring to there is hedging where a supplier sets a rate and takes on the risk of prices changing.

It’s a pity that more suppliers don’t offer a product without the fixed prices.

I’m not so poor that I need the certainty of fixed prices, particularly for electricity.

I’d rather pay market price plus margin without the hedging.