Expert: Sale will not halt premium cost increases

THE Government’s decision to sell the VHI and introduce a new risk equalisation scheme will not stop the surge in the cost of health insurance, an economics expert has warned.

As a private company, the VHI would need to produce a return on capital for its investors and repay the Government for the capital injection it needs to increase its solvency reserve, said Brian Turner, an economics lecturer at University College Cork.

The VHI, however, would be compensated for its older membership profile in the form of money transfers following the implementation of a new risk equalisation scheme.