VHI calls for end to exemption from risk equalisation

VHI Healthcare is calling for an immediate end to the three-and-a-half year exemption from risk equalisation.

It was responding to reports by the Competition Authority and the Health Insurance Authority into competition in the health insurance sector.

The insurance company strongly rejected recommendations by the HIA to extend the exemption period for new entrants to the market.

Under risk equalisation, VHI is paid compensation from other health insurers for what it says is an older loss-making client base.

New entrants to the market don't have to make the payments for three-and-a-half years.

But the VHI has now said that risk equalisation with no exemption whatsoever is the only way to achieve real competition in the health insurance market.

Furthermore, it said that the most critical issue facing the health insurance market is the Quinn group's three-year exemption from the payments following its takeover of BUPA.

VHI has called on Health Minister Mary Harney to scrap the three-year holding period.

This may make it more difficult for VIVAS health to avoid its payments to VHI for its first few years in the market.