Older VHI clients could face major premium increase

OLDER VHI customers face having to pay at least triple their current health insurance premiums following the recent Supreme Court decision not to allow risk equalisation, it was reported yesterday.

Figures compiled by the VHI for the Department of Health indicate the price of a typical plan B insurance premium, if it were risk adjusted, could rise from a projected €745 a year to €2,625 for those aged 80 years and over.

Its figures also suggest the cost for those aged between 70 and 79 years could rise to €2,246 while for customers in the 60 to 69 age group it could rise to €1,435.

The Sunday Tribune , which reported the figures, said the VHI had discussed them with senior departmental officials and had proposed the introduction of an interim alternative system of "co-payment". This would see the Government and older subscribers share the cost of premiums.

Neither the VHI nor the department were commenting yesterday on the issue.

Age Action Ireland said the Government must examine all legal options to protect the community rating principle in the private health insurance market, under which all subscribers purchasing similar products pay the same amount, regardless of their age.

Eamon Timmins, spokesman for Age Action Ireland, said the failure to find a legal solution in the wake of the Supreme Court ruling, which set aside the risk equalisation scheme for health insurers, would mean the cost of private health insurance would become prohibitive for many older people.

"Many people on limited incomes would not be able to afford to pay a three-fold increase in their premiums. This would have the knock-on effect of putting increased pressure on the public health services," he said.

"It is in the interest of everybody - young and old - that the Government explores every legal avenue to find a way of protecting the community rating principle so that people of all ages can afford private health insurance."

Risk equalisation is essentially a compensation scheme under which companies such as the VHI, which has a larger number of older subscribers (who tend to claim more frequently), would receive payments from rivals with a relatively younger membership profile. The VHI had expected it would receive some €40 million in payments under the scheme, largely from Bupa.

Meanwhile, no firm decision has yet been made on VHI price increases this year. Normally it increases its premiums on September 1st but the decision has been temporarily postponed while the company considers the implications of the court ruling, its spokeswoman said.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times