Hibernian Health has responded to the proposals released today by the Department of Health on the issue of changes to health insurance in Ireland.
Hibernian Health has responded to the proposals released today by the Department of Health on the issue of changes to health insurance in Ireland.
The new measures will see a substantial levy of €160 per adult applied to health insurance customers; in addition changes to tax relief at source (TRS) on health insurance premiums are planned. The changes to TRS will only be of benefit in relation to policies for those over 50.
Commenting on the decision Jim Dowdall, newly appointed MD of Hibernian Health, said: "These proposals are blunt in nature and short term in outlook. They are clearly a means to prop up the finances of the VHI at the expense of its competitors and they appear to take no account whatsoever of the need for continued and expanding competition in the health insurance market. We believe these changes amount to a form of state aid. This does not serve the consumer well. The changes are complex and unfortunately will penalise all consumers in particular the lower economic segments."
He continued: "Ultimately these plans are a risk equalisation replacement mechanism through the back door. By applying this change to TRS cash flows the Government has taken the decision to support the VHI and their market dominance as well as their anti competitive behaviours."
He concluded: "The Government has failed to date to consult with stakeholders in the health insurance market. This failure to consult, despite requests for substantive engagement on this issue, could result in the implementation of a health insurance system that is once again open to challenge."
Hibernian Health has re-emphasised the following facts:
- Hibernian Health is committed to Community Rating. This principle is embedded in the current legislation which means all adults access the same premium. Differentiation of premiums by age by introducing differentiated tax relief unnecessarily undermines the principle of Community Rating.
- This proposed levy equates to an approximate increase of 30% on a standard plan which represents €479 for a family of two adults and three children.
- Hibernian Health has no plans to increase prices.
- VHI in their annual accounts for 2007 posted a surplus of €112 million, does not carry solvency requirements and yet appears to expect / demand a state subsidy using a threat to Old Age Pensioners as a means to coerce the Government. Carrying through on their threat would have contravened the existing regulations which made the threat meaningless.
- Hibernian Health is committed to long-term participation in this market. We welcome customers of all ages and seek to work actively with the Minister for Health and Children on all regulatory requirements which facilitate open and fair competition.
-ends-