The Vhi has warned that health insurance premiums could increase by at least 50 per cent if proposals contained within the first part of the Budget outlined by the Minister for Public Expenditure Brendan Howlin this afternoon are implemented.
Mr Howlin said that legislation will be introduced which will scrap the existing system of designated private/public beds in public hospitals and allow hospitals to increase the charges they impose on all private patients. Some 80 per cent of these charges are paid by the Vhi and the move would play havoc with its already stretched finances.
If the Government eliminates the subsidy provided for private medical treatment carried out in public hospitals.it would generate about €18 million in additional revenue. However, it will also undoubtedly lead to additional rises in the cost of private health insurance.
The State’s largest health insurer said as much this evening. It warned that, if implemented in full, the changes will double what it pays for customers attending public hospitals, and if it is to continue to cover all public hospitals would result in a premium increase of at least 50 per cent.
“At a time when an increasing number of people are struggling to maintain their health insurance policies Vhi Healthcare does not believe people can afford this,” the company said.
The VHI chief executive Declan Moran said the changes would have “a profound impact on the private health insurance market and put further pressure on the public system”.
He said that the insured population “simply cannot afford such an increase and we have no doubt that this will hasten the fall in number of those choosing private health insurance, ultimately increasing the burden on the public health system at a time when it is already under pressure to meet its growing demands.”
Mr Moran said the company would have to consider its position and “to decide whether we continue to provide cover for all public hospitals in the future in light of this proposed change”.
He said that while the company would continue to provide its 1.4m subscribers with access to a wide range of facilities, including both public and private it would “need to consider what combination represents the most cost effective use of their premiums. Already the public hospital system can be more expensive than the private one for similar services and this is unsustainable and uneconomical.”
