Price hike may force patients to forgo insurance

Claire O’Sullivan

The Irish Patients Association (IPA) has warned that the 12.5% premium increase sought by insurers VHI could cause financial difficulties for people already struggling to make insurance payments. Ms Harney is widely expected to sanction the increase.

“Old people especially may be on a fixed pension and can’t absorb these increases. It is not fair as it may deter them from continuing on with their policies,” said IPA chairman Stephen McMahon.

“I think the Tánaiste should examine how exactly these pay increases are being justified. People need value for money from their insurance,” he added.

The VHI said the increases were due to a rise in medical care costs and denied they were linked to Ms Harneys decision to defer the introduction of risk equalisation to the Irish healthcare market.

The VHI had sought the introduction of risk equalisation which would have forced rival insurers BUPA Ireland to transfer funds of over E30 million to VHI to compensate for the fact that VHI has an older, more claim-prone client base. The VHI said that, without this compensation, it could be forced to abandon community rating, the system where all clients, regardless of age, pay the same premiums for the same package.

Last week, the Health Insurance Authority (HIA) recommended the introduction of risk equalisation but Ms Harney postponed triggering the scheme. The VHI said it would maintain its community rating, but it has opted for a price increase.

VHI has 93% of the insurance market for people aged 49 or over. Just 7% are members of BUPA or market newcomer Vivas.

Meanwhile, the Department of Health has released reports from its own Health Insurance Unit and from Mercer Human Resource Consulting which recommended delaying the introduction of risk equalisation payouts in a market that includes a dominant player.

“In particular, effects of such payments on competition and on the dominance of the incumbent have not been adequately measured,” the consulting group said.

However, Mercer also said risk equalisation would have to be introduced at some point if the Irish health insurance market is to continue with the community rating principal.

Separately, Medicine Weekly reported that up to 8.5% in fee increases would be paid to the country’s hospital consultants by VHI over the next two years.