News of Bupa Ireland's decision to pull out of the Irish health insurance market has been greeted with dismay and anger by opposition parties, consumer lobby groups and rival companies.
Liz McManus, Labour's health spokeswoman, said she was "shocked and surprised" by the announcement and said she hoped the company would reconsider its decision.
"The loss of so many jobs would be a huge blow to the north Cork area and the withdrawal of the company would result in the loss of a significant element of competition," she said.
Ms McManus urged Minister for Health Mary Harney "to enter into immediate discussions with the company to see if its concerns can be addressed within the overall framework of risk equalisation agreed by the Oireachtas and upheld by the High Court".
Fine Gael leader Enda Kenny said the decision would have major implications for competition in the Irish market and for the choice available to Irish consumers.
He said he had met the President of the European Commission, Jose Manuel Barroso, this morning and asked the commission to investigate the current situation "as a matter of urgency to establish if a way can be found to implement effective competition in the Irish health insurance market".
Green Party health spokesman John Gormley said the news was a "body blow" for the Minister's health strategy and that it should prompt her to "revisit the question of risk equalisation".
"Bupa had given Minister Harney plenty of notice of their intentions, yet she chose to ignore the reality," he said.
"Her intention to introduce greater competition to the health insurance market has failed. BUPA's exit now leaves the VHI with an unchallengeable monopoly. Under the circumstances it would be most unwise for the VHI to be allowed to privatise."
The National Consumer Association said it was a bad day for consumers. "We regret Bupa's decision to pull out of the Irish market. There is little competition in the Irish health insurance market as it is, and Bupa's decision limits that even further," said Ann Fitzgerald, chair of the National Consumer Agency and director of consumer affairs.
She said it was "now critically important" for Ms Harney to address "the dominant position of the VHI in the Irish market.
"It is not good enough to allow VHI a further six years - until 2012 - to meet the solvency requirements which other health insurers must meet. To do so would strengthen and copperfasten the dominant position of the VHI," Ms Fitzgerald said.
"Radical proposals are needed to address this dominance question now. Otherwise, consumers will lose out and the market will continue to be unattractive to new entrants," she noted.
The third health insurance company in the Irish market, Vivas Health, warned that Government policy could kill competition in the market.
The company, which has 2 per cent of the market, said it would fight for as many of Bupa's customers as possible but warned that the VHI's "wide range of state protections and supports" would "give it an unfair advantage in this fight".
"We are looking for clarity from Government if it now intends to further subsidise the VHI with the €100 million required to take on the Bupa customers," Vivas said.
