Ahern lashes out over Bupa pull-out

Taoiseach Bertie Ahern angrily lashed out today at health insurer Bupa’s decision to pull out of Ireland following the long-running row over risk equalisation payments.

The company dramatically revealed it was quitting the market in protest at what it claims is an unfair system, effectively forcing it to compensate its rival VHI.

Bupa said it faced payments of €161m over the next three years – when profits would be only €64m.

But Mr Ahern dismissed that argument and accused the insurer of attempting to create an unfair market.

It also emerged Bupa had made an offer to the Government to take its portion of elderly subscribers from VHI in an attempt to balance the market.

“Risk Equalisation involves, as you know, transferring funds from insurance companies which have a large proportion of young, healthy subscribers to companies which have a larger proportion of older people and more prone to illness,” Mr Ahern said.

“This ensures that younger and older subscribers pay the same amount for similar health insurance – that is what community rating means.

“Under community rating, subscribers pay the same amount for similar cover throughout their lives. This means people can continue to afford health insurance right into those decades of their lives when they are most likely to need it.”

The Taoiseach said this was in marked contrast to the situation abroad, in particular the United Kingdom, where old people cannot afford insurance as premiums rise with age, and therefore risk of ill-health.

The Taoiseach added that the idea was to look after the people who need help.

“I’m not acting tough at all, I’m just saying that somebody wants to come along and say great, sure, listen, if insurance is all about going out and getting 100 people who are likely to get sick for the next 10 years, and sure make greater profits, sure, that’s great, that’s marvellous. And I’m supposed to be impressed with that argument,” he said.

“Then you get 100 people who are like myself, are half crocked, and then we have to pay far more for it (insurance), and they say that’s fair. Market forces, competition ... who are they coddin’?”

Bupa dismissed allegations that it was not in favour of community rating but declined to respond directly to the accusations made by the Taoiseach.

“Bupa Ireland have always been pro-community rating, all its products are community rated. We take people of all ages,” the spokeswoman said.

It is understood Bupa made an offer publicly through the all-party Oireachtas Health Committee that it would take its portion of elderly subscribers from VHI.

“We have always been ready, willing and able to take our fair share of the elderly,” the spokeswoman said.

“Under current legislation every insurer is required by law to accept members of all ages and Bupa Ireland is no different to any other insurer in that regard. We were the first company to accept older people over 65 with no waiting periods and with free screening. We have always had older people on our books.”

Bupa has been battling against Risk Equalisation since it was first mooted more than a decade ago. In December last year, Ms Harney announced payments would commence on January 1 this year and a High Court battle began which Bupa eventually lost.

Only last month, a judge ruled Risk Equalisation should go ahead, that there was no threat to the stability of the market and that Bupa had entered the market in 1994 knowing it faced such a scheme.

Martin O’Rourke, Bupa Ireland managing director, said yesterday that Irish consumers are the real losers with Risk Equalisation as the market will be restored to a virtual monopoly.

He said Bupa brought competition to the market and fought hard to keep it alive yet Risk Equalisation Scheme makes it impossible to have a viable health insurance business.

With Bupa’s departure from Ireland 300 workers in Dublin and Fermoy, Co Cork, will lose their jobs.

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