Harney defends policy

HEALTH Minister Mary Harney has strongly defended the Government policies that led to BUPA’s decision to withdraw from the health insurance market in the face of severe criticism from opposition parties.

Ms Harney stood over the risk equalisation mechanism on the grounds that it was the mechanism to support community rating.

“The Government considers that health insurance cover should be available to all people of all ages without price discrimination,” she said.

“Community rating is designed to ensure that private health insurance is affordable for older people who have paid premiums for many years.”

However, the breakdown in negotiations between the Department of Health and BUPA over its continuance in the market was attacked roundly by the opposition.

BUPA’s decision to pull out of the market because of the imposition of risk equalisation will lead to the loss of as many as 500 jobs (mainly in its Fermoy, Co Cork base) and will mean that its 475,000 customers will now have to seek health insurance from either the VHI or from Vivas.

Fine Gael leader Enda Kenny was strident in his criticism, portraying the Government’s stance as the result of regulatory failure.

“It is a failure by the Fianna Fáil and PD Government to strike a balance between the issues of community rating, risk equalisation and competition in a way which delivers to the Irish people.”

Mr Kenny, who is in Brussels, said there was a need to introduce effective competition in the market, adding that he had yesterday asked EU Commission President Jose Manuel Barroso to examine the issue.

His party’s health spokesman Dr Liam Twomey said Fine Gael favoured both community rating and risk equalisation but said the scheme employed by the Government was an inflexible one that discriminated against competition. He instanced the more flexible scheme in Australia, that made BUPA a net beneficiary because it had an older client profile in that market.

Labour spokesperson Liz McManus asked BUPA to reconsider its decision.

Setting out a markedly different tone from Fine Gael, Ms McManus noted that its Irish operations were extremely profitable.

“I would urge Ms Harney to enter into immediate discussion with the company to see if its concerns can be addressed,” she said.

The Green Party’s John Gormley said that the news was a body blow for Ms Harney’s health strategy. Claiming she had ignored the reality of BUPA’s intentions, Mr Gormley said the methods of implementing risk equalisation needed to be addressed.

Sinn Féin’s Caoimhghín Ó Caoláin said the pull-out by BUPA exposed the contradictions of the two-tier health system. He accused BUPA of wanting to cherry-pick customers.

Local reaction was also strong. Fianna Fáil TD for Cork East Ned O’Keeffe was critical of the Government and said that the State was propping up the VHI.

“It is devastating for the town of Fermoy,” he said. “We cannot have a monopoly in health insurance whether it is because of risk equalisation or whatever.”