VHI rejects claims made by Quinn

The VHI has again rejected remarks made by Seán Quinn, the new owner of rival health insurer Bupa, that the State-owned insurer…

The VHI has again rejected remarks made by Seán Quinn, the new owner of rival health insurer Bupa, that the State-owned insurer has set out to lose money.

The company and said its losses were "inevitable" because of how the market has operated and accused Mr Quinn of wanting to use the health insurance market to generate "windfall profits". It pointed out that it is operated on a not-for-profit basis.

Mr Quinn's comments were reported in media today. He said the financial losses at VHI last year had left the Government with no option but to introduce emergency legislation last month. That legislation closed a loophole that would have allowed Mr Quinn, as a new entrant to the health insurance market, a three-year break from making multi-million euro risk-equalisation payments to VHI.

In a statement this evening VHI said the comments were "totally inaccurate".

READ MORE

VHI said it was a membership-based organisation operating on a not-for-profit basis.

"It is now universally accepted (independent expert groups, the Health Insurance Authority, the Government, the High Court etc.) that an efficient risk equalisation scheme is essential to support community rating," VHI said.

Community rating is the system whereby every insured person pays the same for their health insurance, regardless of age or health status.

VHI said its financial losses "directly resulted from operating in a community rated market without risk equalisation".

"The inevitability of such losses was long predicted. The other insurer operating in our community rated market without risk equalisation received a 'regulatory subsidy' and made huge windfall profits," the statement said.

"It would appear that the new owners of this insurer want to use health insurance to generate similar windfall profits."

VHI said its annual accounts are publicly available and that Mr Quinn had "misquoted" figures from them.

"Vhi Healthcare ranks among the most efficient insurers in the world based on the normal benchmark of efficiency i.e. the operating cost ratio," it said.

It said that as a not-for-profit organisation, it was not concerned with generating profit or rewarding capital.