Harney to make announcement on risk equalisation today

The Tánaiste and Minister for Health Mary Harney is due to make an announcement today on whether she plans to introduce 'risk equalisation' in the health insurance market.

Under the practice, companies like BUPA would be forced to subsidise the VHI to make up for the fact that the latter has a generally older and less profitable client base.

Risk equalisation is designed to protect the situation whereby all policy holders pay the same premium, regardless of their age or health status.

The Health Insurance Authority has been calling for the introduction of the measure for some time, but Ms Harney has so far refused to heed the call.

The authority says BUPA is making excessive profits because of the fact that it only entered the Irish market in 1996 and therefore has younger and more profitable clients.

The VHI, on the other hand, has been in the market for much longer and many of its clients are now elderly.