A scheme which could involve health insurers BUPA having to pay the VHI up to £2 million could have a "seriously detrimental" effect on BUPA and should be deferred for at least five years, according to a submission from hospital consultants to the White Paper on health insurance.
The Irish Hospital Consultants' Association (IHCA) has said in its submission to the Department of Health that the implementation of the risk equalisation scheme should be deferred "in order to allow BUPA gain a significant foothold in the Irish market". The scheme involves a complex set of regulations designed to prevent new entrants to the market keeping claims down by "cherry-picking" customers.
According to a Department of Health spokeswoman, the White Paper is due to be published by the end of this year.
The consultants' group has also called for changes in community rating, saying it should be retained, but with the proviso that young entrants receive some form of "loyalty bonus" or that late entrants - people aged 50 or over - be subject to some form of penalty. This penalty would relate to the age of entry rather than being age-related or illness-related.
The submission said tax exemption at the marginal rate for health insurance should be restored and consideration given to the use of tax exemption as an incentive to subscribers to take out private health insurance at an early age.
The submission stated that the purpose of the risk equalisation scheme was to ensure the community rating philosophy was not defeated by a health insurance provider through the provision of incentives to low-risk subscribers, thereby causing a serious imbalance between the age and risk profiles of the membership of different insurance providers.
The conflicting roles of the Department of Health in its relations with the health insurance industry, and in particular the VHI, should be ended, according to the IHCA.
It also called for the immediate establishment of a health insurance authority to assume the role now exercised by the Minister for Health. The VHI, it said, should report instead to the Department of Enterprise, Trade and Employment.
Legal protocols should be established to ensure that subscribers could transfer without penalty from one insurance provider to another. A system of accreditation for private hospitals and private accommodation in public hospitals should also be established, and joint public/private ventures should be undertaken to fund the building of private accommodation on public hospital sites.