Competition in the Irish Private Health Insurance Market

Figure 7: Key features of Related Health Insurance Products
Product Type
Health Cash Plans
Serious/Critical
Illness insurance
Income
Protection
Insurance/
Permanent Health
Insurance
Key features
Daily cash payments for inpatient
hospital stays and
perhaps payments towards
primary care medical costs.
Lump-sum cash payment if
subscriber is diagnosed with a
specific illness or disability
covered by the policy (e.g.
cancer or stroke) for which the
long-term incapacitating effects
are not normally covered by PHI.
Provides a regular income if a
subscriber becomes unable to
work as a result of physical or
mental ill-health.
Proportion of
PHI holders
with this
product 32
21%
33%
31%
Are Policies Offered by Restricted Membership Undertakings
Substitutes for PHI?
3.12 In addition to the three main open enrolment PHI providers, PHI is also
provided by ‘restricted’ membership undertakings, so-called because
their membership is restricted to employees of particular organisations
and their family members. The main restricted schemes are the ESB
Staff Medical Provident Fund, the Prison Officers Medical Aid Society,
and St Paul’s Garda Medical Aid Society.
3.13 The PHI plans offered by restricted undertakings are only available to
very specific groups of people (e.g. ESB staff, prison officers or
members of the Gardai respectively and their family members). They
are not available to the general public. The policies offered through the
largest restricted schemes are similar to the most popular policies
offered by the open enrolment providers. It is highly likely that a large
majority of the members of these schemes would subscribe to an
open-enrolment health insurer if their particular restricted scheme was
not available to them. Therefore, there is asymmetric substitutability. 33
Nevertheless, these schemes do not exert any competitive discipline on
the three main insurers as they are not available to the general public.
For this reason, the restricted membership schemes are not considered
to be in direct competition with open enrolment PHI plans and as such
are excluded from the relevant product market.
32 Source: The Private Health Insurance Market in Ireland – A Market Review, September 2005 (HIA)
33 Those people who are eligible to take out insurance under the restricted schemes have the option of
taking out a policy with any of the three main open enrolment insurers so for these people, the
products would be substitutable.
44