VHI members face 12.5% cost hike

VHI customers whose premiums have more than doubled since 1999 will have to pay 12.5% more for their care plans from September.

VHI has informed Tánaiste and Minister for Health Mary Harney that it proposes to apply an average premium increase of 12.5% on its hospital plans A to E, Options Plans A to E and Life Stage Choices plans from September 1.

The increase is being attributed to the absence of a risk equalisation scheme, and not on the €32 million loss VHI reported for last year.

Risk equalisation is a system under which rival insurers would pay levies to the VHI for having a greater number of older, high risk members. The VHI claims to have 95% of over-70s in the health insurance market.

The insurer has refused to rule out further increases for its 1.5 million members, even if risk equalisation is introduced.

VHI chief executive Vincent Sheridan said yesterday, an ageing population, the development of increasingly expensive drugs, accelerated technology innovation and increasing affluence would drive up cost. Chief executive of rival insurer VIVAS Health, Oliver Tattan, urged VHI members to check out their options to “ensure that they get the health insurance that they need at an affordable and fair price”.

Last December, Ms Harney, announced that risk equalisation in the health insurance market would be introduced on January 1, this year. The VHI is awaiting the outcome of a High Court challenge by BUPA against its introduction. BUPA claims it would face payments worth €161 million over three years, under the scheme.