Irish health insurance changes under fire

Changes to the chaotic Irish health insurance system announced yesterday have come under fire from various sectors. Quinn healthcare claimed that VHI will remain in a dominant position, reportedly commenting: This could have serious implications on the level of competition in the market which is not in the interests of health insurance consumers, Quinn said in a statement.

The Risk Equalisation Scheme, overturned earlier this year, was partly reinstated. Quinn reportedly continued: The scheme fails to take account of the dominant position and significant pricing advantage enjoyed by the VHI and simply makes it much more difficult for VHI’s competitors to compete.

The company went on: Our main concern relates to the €160 levy per member, said Quinn Insurance . This levy is due per member irrespective of the level of cover a member has plan (i.e. is 50% levy on lower plans and only 8 % on high level plans) and this ultimately means that less well-off people on lower plans are subsidising those better off who can afford premium plans. This is totally unfair. The Government and VHI claim that this scheme is required to protect community rating and intergenerational solidarity. This is simply not true. The health insurance market in Ireland does not need VHI to be compensated to maintain community rating. Despite no compensation ever being paid to the VHI it has remained profitable since competition entered the market and community rating is not under threat. It also appears that the scheme will generate revenue for the Government – ie the levy is greater than the cost of the additional tax relief . In essence, this is an additional tax on health insurance consumers.