PROPOSALS PUT forward by the Department of Health for the State to buy Quinn Healthcare and merge it with the VHI as part of overall reforms to the private health insurance market would cost about €500 million, the Department of Public Expenditure and Reform has estimated.
The figure is understood to have been set out in the Department of Public Expenditure’s confidential response to a memo tabled by Minister for Health James Reilly on the issue for Cabinet this week. The Cabinet did not come to any final decision on the proposals.
The Irish Timesreported yesterday that Dr Reilly had sought permission from the Cabinet to investigate the State purchase of Quinn Healthcare, which is in administration following its takeover by Anglo Irish Bank from the Quinn Group.
The Government is also considering proposals to invest up to €220 million in new capital for the State-owned VHI to allow it to be authorised by the Central Bank in the same manner as its competitors.
As well as recapitalising the VHI, the plan would require funding to buy Quinn Healthcare and to invest in its reserves, bringing the estimated total cost to about €500 million.
The State has been given a deadline of December 9th to provide the European Commission with a plan on how it intends to deal with issues arising from an adverse finding by the European Court of Justice last September on the issue of VHI authorisation.
It is understood that the Attorney General has warned that Ireland faces possible fines of €3.14 million next year if it does not provide a response to the judgment.
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