VHI boss refuses to confirm salary cut amid fury

VHI chief executive Jimmy Tolan has pointedly refused to say if he took a pay cut last year amid growing anger and concern by the insurer’s 1.35 million customers at its decision to introduce dramatic price hikes of up to 45% in the cost of health insurance from next month.

The VHI announced it will increase its charges by 15%-45% from February 1, forcing some customers to pay an extra €37 per month on their existing premiums.

But Mr Tolan repeatedly refused to answer questions about his salary in 2010, despite the fact that the figure will be published in the VHI’s annual report later this year. He enjoyed a total package worth €412,003 in 2009. However, he admitted that the VHI had cut administration costs, which included salary reductions, by €15 million last year.

Medical experts have also expressed concern that the massive price hikes by VHI will place further pressure on already overburdened public hospitals as thousands of people may no longer be able to afford private healthcare cover.

The president of the Irish Association for Emergency Medicine, Fergal Hickey, said it was inevitable such large-scale price rises would lead to a greater number of patients relying on public hospitals for treatment.

“It is a well-documented fact that demands for A&E services increase in a recession as people give up taking preventative medicine. Patients previously able to avail of procedures under their private insurance scheme are likely to end up on longer waiting lists under the public system if they give up private cover.”

Mr Hickey also noted that the largest VHI increases would disproportionately affect elderly patients — the age group most likely to need hospital care.

Over 70,000 people have ditched private health cover over the past two years, with the VHI alone losing 47,000 customers in the past year.

The latest increases will see the cost of private health insurance rise €317-€444 per annum for a single adult on VHI’s loss-making Plan B schemes, while the cost for a family of two adults and two children will increase by €273-€331 per annum for the VHI’s most popular family plans.

VHI said 60% of its customers would be subjected to a 15% increase.

Mr Tolan insisted the sole purpose of the hikes was to fund the growing healthcare needs of customers. He claimed the VHI was facing potential losses of €147m on older customers if it didn’t introduced the hikes.

However, customers can avoid some of the forthcoming increases by contacting the VHI now and changing their renewal date to before February 1, allowing them to avail of current premiums for 12 more months.

Customers can also achieve savings by asking insurers to quote the price for the corporate equivalent of their existing policy.