We’ll pay when VHI less dominant, says Vivas

The largest health insurer VHI should not receive any risk equalisation payments until its market share is significantly reduced, its competitor Vivas Health claimed yesterday.

Chief executive of Vivas Health, Oliver Tatten, called on Health Minister Mary Harney to adopt a policy whereby no risk equalisation payments could be made to VHI until there are five players in the health insurance market.

Parallel to this, he said VHI’s market share should be reduced to below 50% before payments are made.

“I think that would be a move that would attract a lot of players into the market, and it could be done overnight,” said Mr Tatten.

His comments followed the introduction of emergency legislation closing off a loophole which would have allowed new entrant, the Quinn Group, to avoid risk equalisation payments.

Instead, both Vivas and the Quinn Group will have to make payments to VHI to compensate for the older profile of its customers.

The Vivas chief executive insisted that if insurers were not obliged to make risk equalisation payments, they could introduce more competitively priced products.

He maintained that where risk equalisation existed in other markets, there was no single dominant player. “That’s the problem in Ireland, it’s always been around how much protection we afford the VHI rather than a strong policy on how we actually get strong competition into the market,” he added.

Yesterday, the decision by the Quinn group to remain in the health insurance market and takeover BUPA Ireland was welcomed by the Taoiseach Bertie Ahern.

He said it had been necessary to close the loophole despite the precedent which allowed new entrants to enjoy a three-year exemption from risk equalisation payments.