Let VHI share the risk fairly with BUPA

THE Taoiseach’s recent comment that BUPA was out to ‘screw’ the elderly and ‘crocks’ like himself showed how much the Government is out of touch with reality on this issue.

After 10 years in the Irish health insurance market, BUPA did not refuse membership to the elderly. This assertion has been endorsed by Seán Browne, the TCD economist.

I am older than the Taoiseach, and certainly ‘crocked’, but I am a very satisfied member of BUPA which operates health insurance cover in 192 countries.

It has seven million members and 40,000 employees.

It is a national tragedy that BUPA is forced out of the Irish health insurance market.

Risk equalisation is not driving it out. It is the draconian level of contribution demanded by the Government for risk equalisation that turns BUPA’s Irish entity into a severe loss-making operation. BUPA’s withdrawal sends out negative signals to international investors here, both actual and potential.

With BUPA departing, how will the Government fund the €161 million for its risk equalisation scheme over the next three years?

Obviously, if it introduces risk equalisation, either health insurance policyholders from VHI and Vivas will fund the scheme or it will come from the taxpayer, or a combination of both.

My proposed solution is threefold:

1. The Government to reduce substantially its level of demand for risk equalisation funding from BUPA and to extend the period for its implementation.

2. BUPA to remain in the Irish market and to contribute towards risk equalisation at a level that keeps it viable here.

3.VHI to contribute towards risk equalisation at a level proportionate to that of BUPA.

The average age of VHI membership is 44 compared to 38 for BUPA.

The EU commissioner and former Minister for Finance, Charlie McCreevy, has already threatened the Government with legal action over its failure to restructure the VHI and for its risk equalisation scheme.

The Tánaiste seemed to hint on RTÉ’s Questions & Answers that the Government would be prepared to renegotiate the level of contribution to risk equalisation.

The alternative is for the VHI to have a 95% share of the market. With such a monopoly, one does not have to be an economist to predict that premiums will soar.

As a member of a BUPA group scheme, I would certainly be prepared to pay a higher premium to it rather than be at the mercy of a monopolistic VHI.

Michael O’Connell

Mansfield House

Passage West

Co Cork