The Minister for Health this evening indicated that he will approve a request for an 8.5 per cent price increase in VHI premiums.
Minister for Health, Mr Martin, said he had been told last year that the private health insurer was considering an insurance premiums rise of 18 per cent. In this context, the Minister believes an 8.5 per cent rise is good value.
"I will be bringing a recommendation to Government along the lines of that recommended by the board," he said.
The VHI defended its request for a premiums increase. The insurer insisted that such a move derives from the increasing cost of patient care.
Mr Vincent Sheridan, chief executive of the VHI, stated that "for every €100 the VHI receive in premiums, €90 goes back into patient healthcare."
He said health insurance premiums went up every year because the cost of health care was also increasing every year."The cost of healthcare rises from one year to the next. Members' healthcare is our priority ,and our members demand the very best in the patient care they receive. Therefore, the cost of healthcare increases from one year to the next," a VHI spokeswoman added."The reality is that healthcare in Ireland is still extremely competitive," she added.
The company understood the effects any increase in premium has for its members, she said, but nonetheless the VHI itself remained a highly efficient heath insurer.
Meanwhile, the Minister for Health, Mr Martin, is considering whether to grant the application for the price increase. The fees rise was officially requested in a letter received by his department from the board of the VHI last Friday evening.
Legislation obliges the VHI's board to notify the Minister of proposed premium increases. He has the power to refuse the introduction of such increases.
"The Minister has until 25th July to issue any direction to the board in respect of the proposed increases," a Department spokesman said.
Should the price increases be granted, they would come less than a year after VHI premiums rose by 18 per cent.
Standard plan subscribers, who comprise the majority of the company's 1.5 million customers, would see their premiums increases by 8 per cent under the latest proposal. Those who subscribe to the higher-cost "options" plan would see a price hike of 7 per cent.
If the application is granted, VHI premiums will have risen by 50 per cent in 18 months.
Opposition parties have condemned the VHI application, with Fine Gael branding the move "frightening", and Labour indicating it would be raising the issue in the Dáil.
Meanwhile, older people who have not reached 70 and who are not entitled to a medical card will be particularly hit by any increase, Age Action Ireland has said.
A spokesman for the group said that even people with medical cards who were reluctant to rely on the public health services would be affected, as most older people lived on fixed incomes. Any increases would force them to think seriously about renewing their health cover, he added.
BUPA, the other health insurance company operating in Ireland, has not yet indicated it would increase prices.