By Gary Culliton.
The Chairman of the Health Insurance Authority (HIA) has told the Joint Oireachtas Health Committee that the recently-published Health Insurance (Amendment) Bill 2012 contained a range of provisions to strengthen the risk equalisation system and to put it on a permanent footing.
In particular, if enacted, the system would take account of gender, level of cover and level of hospital utilisation, as well as age, according to Jimmy Joyce. “These measures are an important and necessary support to the operation of community rating, as will be the need to continue to strengthen the risk equalisation system as circumstances develop,” he said.
Also before the Oireachtas last week was Vhi’s Director of Marketing and Business Development Declan Moran, who said every sophisticated risk equalisation scheme in the world made allowances for health status.
Meanwhile, recapitalisation of Vhi Healthcare — likely to cost €100 million — was expected by the end of 2013, Moran said: “If Vhi is authorised by the Central Bank and starts making profits, it can repay the €100 million.
“It is capital. The Government could, alternatively, sell the Vhi. That is not in the current programme for government. Another way to solve the problem would be for Vhi to pass some of its business on to a reinsurer, which would take a certain amount of the risk. The reinsurer would be paid for the use of the €100 million it would provide. Swiss Re and Munich Re do that type of business internationally. However, the most important thing such firms will seek to see is a risk equalisation scheme that would persuade them Vhi is set to stay in business.”
Insurers had been working hard to price older customers more expensively, Moran said: “If you were setting up an insurance company, you wouldn’t be worried about good deals in hospitals… you would seek to insure young people and write yourself a big, fat cheque.”