A new report commissioned by Vhi Healthcare has claimed risk equalisation is essential in order to create conditions of competitive equality in the Irish health insurance market.
The findings of the new report entitled "Entry, Risk Selection and Stability in a Community-Rated Health Insurance Market without Risk Equalisation" were launched today.
The report was conducted by DKM Economic Consultants and commissioned by Vhi Healthcare.
The report argues that a competitive health insurance market with community rating and open enrolment but without risk equalisation will prove to be unsustainable.
The report said "market instability is inevitable in the absence of risk equalisation".
According to Colm McCarthy, managing director DKM Economic consultants: "The case is overwhelming for the introduction of risk equalisation.
"A market with risk equalisation will be more competitive in the sense of economically useful competition than a market without it.
"Without risk equalisation the Irish market will continue to be a rare and possibly unique example of open enrolment but without any offsetting mechanism to deal with risk selection."