Support in all its Forms

Unsurprisingly, there’s still lots of confusion when it comes to Irish public hospital bed charges, and what you can expect to pay as an insurance holder. If in the last four years you’ve been admitted to a public hospital through A&E, you may have been asked to sign a form, but not been sure what it meant. Here, we’ll explain what the Private Insurance Patient form entails, how it affects premiums, and why you’re not obliged to sign it.

Background

Back in 2014, the Irish Government changed the way public hospitals charge health insurers. Prior to this, the insurer was only charged a higher rate than that charged to the general public if the patient was guaranteed to be accommodated in a semi-private or private room. Now though, health insurance customers can be charged over ten times the normal rate, regardless of whether or not they receive this kind of accommodation.

What do I Need to Know?

Once you’ve been admitted to a public hospital, and you have disclosed that you have health insurance, you’ll be asked to sign the Private Insurance Patient form. What might not be made clear to you is that by signing this form, you waive your rights to public treatment in a public hospital. However, unless the hospital can guarantee you that private or semi-private room, you’ll receive the exact same treatment as a public patient. 62%* of people are unaware that private patients can be charged over ten times the public rate; in fact, by signing the form, your health insurer will be charged €813 per day compared to the public rate of €80. Remember, you’re within your rights to not sign the form, and you’ll still receive the same treatment if private or semi-private accommodation isn’t available.

Increased Premiums

There’s huge financial repercussions when health insurance holders sign the form without realising what it means. The issue has actually increased the cost of health insurance claims by €200 million a year – having a direct impact on the price you pay for your health insurance. Plus, if you sign the form, you’re essentially paying twice for your stay in a public hospital; once through general taxation, and again through your private health insurance.

What are my Options?

Before you sign, be sure to ask: "Can I be guaranteed a private or semi-private room?" If the answer’s no, the treatment you’ll receive will be the same as public. Regardless, if you sign the form, you’ll be charged (through your health insurer) ten times more – making the question well worth asking!

To find out more, visit insuranceireland.eu

*Research - Ipsos MRBI, 2017 on behalf of Insurance Ireland.

We are currently doing a lot of planning work with clients whose financial situations have changed greatly in the last year. As part of this process, we’ve taken a little bit of time to stop and reflect on some of the changes to their lives in general, how these might impact their future and how these changes feed through into their financial plans. We’ve noticed a number of themes emerging.

We are resilient as a species, but we are very dependent on each other

We’ve had a global pandemic, but the human race has come together to fight it as best we can. We’ve seen scientists across the world building an understanding of Covid and numerous drug companies creating the all-important vaccines. As individuals, we’ve realised that we’re only as strong as those around us. Where people refuse to wear masks, don’t socially distance and ignore health guidelines, we all pay the price.

The recovery of our economies is going to take similar resilience, collaboration and the best economic minds. Hopefully as economies recover and thrive again, the stock markets will also push on, to the benefit of your pension funds and investments.

Some have been impacted more than others

This is a sad fact of the pandemic, but there is no doubt that some people have been significantly impacted, while others have been relatively untouched. It has sometimes seemed a bit of a lottery as to how different people have been affected in terms of health, career, job security and financial impact.

As a result there is no “one size fits all” solution for people’s financial plans. With some clients it’s a case of continuing to grow. For others, a review of goals and ambitions is needed, accompanied by a tweaking of their plan. For people badly impacted in the past year, I’ve had to fundamentally review their plans and plot a new course of them. Every plan is different.

Uncertainty is an uncomfortable dimension of life

Covid has wreaked a trail of uncertainty; will I get Covid / Long Covid, how sick will I get, when can I visit my parents again, when can I go on holidays, when will I be able to reopen my business, what happens when the support schemes end etc. For most of these questions, there is no definitive question, so we muddle along as best we can.

However you might not have the luxury of just muddling along when it comes to your finances, and this demonstrates the importance of a robust financial plan that has been tested for unexpected events. We call these “What If” scenarios. When completing a lifestyle financial plan with our clients, I look at a range of scenarios and put in place solutions in case they should come to pass. Plans don’t remove uncertainty, but they definitely help you manage it.

Our health is the single most important factor in our lives

No surprise here, particularly after the last year. But we all used to rather blithely say that “your health is your wealth” without thinking too much about it or unless ill health had visited your family. Now we know how true this is, and that factors such as career or money fall quite far behind.

From a financial perspective, I have seen first-hand the importance of having adequate financial protection in place, whether this is Specified Illness Cover or Income Protection. They may appear to be unnecessary or a luxury purchase… until your health fails you and you need the financial support.

Control what you can control

You’ve no control over the path of the virus or the behaviours of others. You can only influence the factors that you control – taking the necessary health precautions and your own attitude to staying safe.

Likewise with your financial plan, you can control the amount of risk that you take, your investment time frames, your spending habits and a number of other important levers. You’ve no control over the markets, changes to tax rates and the broader economic backdrop. Focus on the factors that you can control and make this central to your financial plan.

This includes your financial behaviours, which have been all-important over the last 12 months. The last year has been a rollercoaster, with the market dropping sharply by more than 30% in Quarter 1 2020, before rising by more than 70% over the rest of the year. We saw the importance of leaving your emotions at the door, not succumbing to fear and not panicking as the market fell. Those who did, paid a heavy price in missing the recovery. We also saw in recent months many investors falling victims to greed as they piled into Tesla and GameStop at inopportune times. Build a robust plan, commit to it and shut out the short-term noise.

The last year will live in our memories forever. Use these memories to build a brighter financial future for yourself and your family.  

Where do you start with Warren Buffett? Widely recognised as the world’s shrewdest investor, the “Sage of Omaha” is now 90 years young and still doling out nuggets of advice to investors across the globe. Using his investment expertise, he had amassed a fortune of some $79 billion as of August 2020, making him the 4^th wealthiest individual in the world.

Buffett is chairman and CEO of the Omaha (Nebraska) headquartered conglomerate, Berkshire Hathaway. His annual letter to shareholders is highly valued and their annual shareholder’s meeting has grown into an enormous event, attracting crowds some years in excess of 40,000 people! People want to hear what Buffett has to say.

The only infuriating factor in all of this is that he makes it all sound so simple… While of course it is not, he is guided by a series of principles that he sticks to and he regularly speaks of these through pithy and highly valued quotes. The challenge we faced in picking out some of his best quotes was reducing them to the number below. Here are seven of Warren Buffett’s best quotes.

1. “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”

This is known as his golden rule and is actually a bit of an odd one. He is certainly not saying that one should invest only in instruments that can never fall, as this would rule out investing in the likes of shares. Instead he is saying that one should not invest in instruments that have real potential to be lower over a reasonable timeframe. He believes that rationality must sit at the heart of investing.

Losing in the short term is a part of winning over the long term. This never includes taking unnecessary risk such as investing in single or speculative assets that can lead to catastrophic losses. If you want to make money, you need to preserve your capital over any reasonable timeframe.

2. “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

There is a theme of time running through many of Buffett’s best quotes, no more so than this one. A tree takes many years to grow and provide shade – when faced with an empty space in a garden or field, it can be tempting simply not to bother planting it and waiting for it to grow.

It’s the same with investing. Don’t expect immediate results. Smart investments require you to initially take action, they need a lot of time and you need to be patient. Don’t look for quick results – that’s speculating.

3. “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

In this quote, Buffett explains that the route to success for the average investor is not through short term bets on particular stocks, even though their growth may look like a dead cert. He believes that success for the average investor is achieved through long-term passive investing across an index, as opposed to trying to achieve quick wins through active management decisions.

4. “Price is what you pay, value is what you get.”

This is another of his famous quotes. In this he demonstrates his support for value investing as opposed to growth investing. Value investing is investing in businesses where the share price is deeply discounted to the value of the company, and you are effectively buying it on sale at a low price. Another quote that he also came out with about value investing was, “Whether we’re talking about stocks or socks, I like buying quality merchandise when it is marked down.” It makes sense – but you might be amazed at the number of people who want to buy stocks after they’ve had a really good run… and are now very expensive to buy.

5. “Risk comes from not knowing what you are doing.”

Warren Buffett places tremendous store in taking time out every day for reading and just thinking. While others are taking impulsive action and often just blowing a hole in their investments, he counsels the importance of educated and researched decisions. Taking your time and taking wise, careful decisions reduces your investment risk.

6. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

Another famous quote that if people in Ireland had listened to in the noughties, we would have saved ourselves a lot of pain. As Irish people bought second and third rental properties, and holiday villas in places they couldn’t find on a map, friends and family members followed them. Greed took over and a very expensive fall was the inevitable result. In hindsight, this was the time to be fearful and run away from such investments.

We see this in stock markets too. As markets climb high, novice investors get greedy and buy in when stocks are very expensive. Likewise after market crashes, we see uneducated, fearful investors sell up at a low price when this is the best time to be greedy and buy in.

7. “No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”

Back to the theme of time – there are some things that just cannot be rushed! Is there any better example than producing a baby? Buffett often reminds us that investments are similar, they take time to grow. Looking for quick results often ends up as an expensive mistake.   

Warren Buffett teaches us a lot of valuable and common sense lessons about investing. He also teaches us about linkages between investments, money and life in general. We’ll leave you with a final, refreshing thought from him about being a wealthy man and the potential impact this could have on his children – there’s a lesson in here for all of us.

"I’ll give my kids enough money so that they would feel they could do anything, but not so much that they could do nothing."