Risk equalisation will only increase costs

COMMUNITY rating only provides a significant advantage to older people if a large number of younger members, with lower health expenses, can be encouraged to come into the scheme.

So when BUPA demonstrated this was possible, you would expect a Government that was genuinely interested in reducing the cost of private health insurance to the elderly to say “well done” to BUPA and, to the VHI, “if BUPA can do it, why can’t you?”

That is what competition is supposed to be all about. Instead, by introducing so-called risk equalisation, the Government has served notice on all potential private health insurance providers that it is pointless trying to lower the average age of their customer base because that will only be to the advantage of the VHI.

The effect will be to increase the cost of private health insurance to all, including the elderly. Risk equalisation is community rating gone mad.

Incidentally, there is nothing to be gained by breaking up the VHI into four units if each of them inherits the present complacent attitude and the Government continues with risk equalisation.

The break-up will merely provide an excuse for barring genuine competition in the health insurance market.

Allen Crosbie

Merville

Cobh

Co Cork