A Fine Gael senator today told an Oireachtas committee that Ireland's private health insurance market is almost a "cartel" and prices have increased since competition was introduced.
Senator Fergal Browne told the Oireachtas Health Committee that since Bupa Ireland entered the market in 1996, policy premiums have almost doubled in that period.
"At the moment, there is no competition in the market," he said. "At the moment you could nearly say there is a cartel operating in the private medical insurance area.
"The normal thing would be to bring in as many competitors as possible, and it will cause a reduction in prices, and everybody would get better services. But that might not necessarily be the case in this situation."
The committee was today discussing the issue of risk equalisation to level the playing field in the health insurance market. Under the regulatory scheme, Bupa could have to pay €30 million to VHI because the state body has older and higher-risk customers.
The VHI, which has 80 per cent of the market, has argued that new rivals can cherry-pick younger and healthier customers, so minimising payouts.
Speaking to the committee, VHI chief Dr Vincent Sheridan claimed Bupa was a multinational that was cynically pursuing profits in Ireland rather than market share. "The profits generated in Ireland subsidise its operations in other countries."
Mr Sheridan asked if Bupa cared about the benefit of its members or "the profit aspirations of its financial backers." He stressed that risk equalisation was essential for consumer competition and may not bring down prices but would slow the rate of increase.
Health Insurance Authority chairman Prof Alasdair Wood earlier told the committee he was concerned that 25 per cent of the Irish population had neither medical cards nor private health insurance.
Vivas Healthcare, which entered the market last autumn, has complained to the European Commission about VHI because it has an unfair advantage as a state firm.