Harney pressured to block Vhi price hikes

Health Minster Mary Harney was tonight under renewed pressure to block price hikes by health insurer Vhi until a confidential audit on running costs is published.

The company has faced criticism since warning customers and patients they face increased fees of up to 45% from next month as it battles to balance the books.

But experts at consultancy firm Milliman handed a report to the minister in September which identified massive inefficiencies at the Vhi.

Dr James Reilly, Fine Gael health spokesman, repeated his call for an open assessment of the insurer’s finances.

“The Irish taxpayer has paid for this report and the Government received it last September. It should now be published without delay,” he said.

“It is ridiculous to hear that the Government is now talking about a new risk equalisation scheme not coming into effect until 2013 when it is already two-and-a-half years since the Supreme Court struck down the previous scheme.”

A new approach to risk equalisation is needed to support insurance companies with a higher proportion of older, often sicker and therefore more expensive, customers.

Dr Reilly added: “Meanwhile the Vhi is heaping pain on its customers, taking the easy way out instead of driving down costs and protecting customers.”

The Vhi has been invited to the Oireachtas Health Committee on January 25 to answer questions on the price hikes. The premium increases mean price hikes of between 15% and 45% from February.

US consultancy and actuary business Milliman were commissioned by the Department of Health last summer. Officials insist it is commercially sensitive and cannot be made public in full.

The Department has said it was involved in ongoing discussions with the Vhi over claims of cost management issues identified by Milliman.

The Vhi, which is for sale, has said it has already delivered savings of 100 million euro through a range of cost containment initiatives.