VHI hits 1.5m with fifth hike in three years
The company yesterday notified Health Minister Micheál Martin it intends to increase premiums by 3.8% for its hospital A to E plans and 2.5% for option plans.
VHI subscriptions rose by 8% last September and by 18% in 2002. The cost of cover rose 50% in the past four years and 100% in seven years.
Fine Gael health spokes-woman Olivia Mitchell insisted it was difficult for the VHI to justify a price increase after a profit of €34 million.
"Undoubtedly, the cost of hospitalisation is rising and will continue to rise as long as there is an absence of competition in the market," she said. "In effect, the Minister for Health provides the service, sets the price and bizarrely adjudicates on the price VHI can charge its customers to buy the service from him.
"What is needed in Irish health is a change of emphasis away from the already bloated hospital system and towards prevention and primary care.
Labour's Liz McManus urged Mr Martin to treat the VHI request with extreme caution.
Despite the alarming increase she said the minister should sit down with the VHI board in a bid to find a way out of its funding difficulties.
"VHI cannot be expected to eat into its own reserves to fund itself," said Ms McManus.
However, VHI chief executive Vincent Sheridan said the 3% average rise was significantly less than previous years. He also claimed the hike was substantially less than the rate of increase in the cost of medical care, which was running at over 10% yearly.
Mr Sheridan said the increases will help fund the new Galway Clinic and the Shandon Street hospital in Cork.
The company was not seeking an increase in its primary care HealthSteps plans, he said.
According to VHI, private health insurance costs in Ireland remained among the lowest in the world.
Similar cover to Plan B cost four times more in Britain, six times higher in the US and eight times more in Germany.
Mr Martin has 30 days to accept or reject the company's request. Although the approval of the minister is not required for any increase announced by VHI, he does have the power to veto an increase within 30 days of receiving notice of it.
He has exercised the veto once since becoming minister.
The minister's spokesperson confirmed Mr Martin had received a letter from the VHI containing proposals for the increase.
However, she said it was too early for him to make any comment in relation to the proposed increase.
Mr Martin will hold talks with the State medical insurer within the next week to hear its case for the increase.
