THE VHI must “address its claims costs aggressively” rather than relying on other elements such as “huge price increases” or risk equalisation, Minister for Health Mary Harney has told the Dáil.
Outlining some of the main findings of a report by the Department of Health’s actuarial advisers on the health insurer’s claims costs, the Minister said she hoped to publish as much information as possible on the report which she received in September.
Speaking during a Fine Gael Private Members’ debate on private health insurance, Ms Harney said the report found the VHI was giving “limited focus” to what it was paying hospitals and could make savings of up to 10 per cent in this area.
“This could be achieved regardless of the risk profile of the insured population. Even though the company has a very high proportion of the older population, the report concludes that savings of this order are still possible.”
Ms Harney also highlighted that the VHI “has been concentrating on the issue of risk equalisation to the exclusion of improving its techniques for managing claims effectively”.
The Minister said she had discussed these issues with the chairman and chief executive of the VHI. “Without interfering in the running of the company, I believe I am entitled to insist that these issues be addressed. This is made all the more important given the VHI’s decision to increase its premiums by so much.”
Ms Harney said she was “extremely disappointed” with the price increases and said it was possible for consumers to get better prices both between and within insurers. She highlighted that Plan B in the VHI would cost €1,224 for an adult whereas the VHI Teachers’ plan was €772, offering the same hospital cover. She said “it is not as its title might suggest just available to teachers”.
She also warned insurers against trying to discourage consumers from joining or moving plans.
Opening the debate Fine Gael health spokesman Dr James Reilly said the number of people with private health insurance had decreased by 70,000 in almost two years. At the end of 2008, there were 2.297 million people with private health insurance, and this was reduced by 37,000 in the following year and a further 33,000 up to the end September of last year.
“This clearly reflects the unaffordable increases in private health insurance over the past two years, combined with the downturn in the economy and increasing unemployment,” Dr Reilly added.
It was extraordinary that at a time when everything else was decreasing in cost, health insurance was increasing. There was a huge injustice involved, he said.
People had paid premiums to the VHI for four to five decades, staying loyal and using very little of it, but seeing it as supporting something worthwhile and viewing it literally as an insurance against health problems they might incur in their older years.
Now when such people were in need of the health services, they found VHI premiums unaffordable. It represented a slap in the face for all those years of loyalty, said Dr Reilly.
“A 45 per cent increase is intolerable and not justifiable,’’ he said. That was like so much that that had happened over the years in the health service, where they had seen the lazy option taken every time, and where frontline services were cut and patients suffered, he said.
Catherine Byrne (FG) repeated her party’s demand that the Government instruct the VHI to postpone the increases. She said there was fear among people in recent weeks, particularly on the part of the elderly, because of the high number of people on trolleys and the pressure of unemployment and rising household bills.
The VHI increases were “unacceptable and immoral’’. People, she said, had private health insurance to ensure they had cover if they became ill. But people were dropping private insurance in their thousands because they could not afford it.
