Aviva said it was “deeply concerned” by the VHI’s price hike, which it claimed was evidence the insurer has abandoned community rating in favour of targeting younger customers.
“With today’s 45 per cent increases, the continued deterioration in the VHI’s reserves and its continued failure to meet the regulatory requirements for insurance companies, it is clear that the VHI continues to operate without accountability,” Aviva said in a statement.
Quinn Healthcare said today’s announcement was “a direct result of the inefficiencies of the VHI”.
In December, the Government announced that the health insurance levy would increase by almost 11 per cent for adults and 20 per cent for children.
“Despite the fact that this levy directly benefits the VHI in excess of €55 million at the expense of its competitors they have now announced another significant price increase,” said the insurer’s general manager Dónal Clancy.
“Strong intervention by the Government is now an urgent requirement to prevent the VHI from continually penalising its most vulnerable customers with unaffordable increases while simultaneously ignoring the significant cost savings to be made by reforming the VHI.”
The Irish Brokers Association said the increases could add €600 to the cost of a VHI plan for a typical family.
“The increases in the cost of our private health cover may ultimately lead to a situation where the under 40s, particularly those with large mortgages opt out of the system due to absolute affordability,” said the association’s chief executive Ciaran Phelan.
“If the average age of private health members increases as a result, the cost for the remainder will rise exponentially until no-one can afford it. In simple terms, we have an Irish/ American health system of Irish standards with American prices,” he added.
Community organisations representing pensioners reacted angrily to the news.
Age Action said this afternoon it was shocked at the levels of increase announced.
“Increases of between 21 per cent and 45 per cent on Plans B, C, D, and E options will inevitably put the cost of private health insurance beyond the reach of many older people. And it is precisely the same cohort of older people who were hit badly in the recent budget, those retired on modest public or civil servant pensions,” said the organisation’s senior information officer Gerard Scully. “Many of these will find it difficult to move to another provider and many may also have lost their entitlement to the medical card.”
The Irish Senior Citizens Parliament said the increase would put healthcare beyond the reach of many older people.
Chief executive Mairead Hayes urged the Health Insurance Authority to take immediate steps to clarify whether the rise in premiums has been sanctioned by it. She also called on the Minister for Health and Children to intervene to resolve the issue immediately.
“Older people are specifically referred to in the VHI announcement. It is only natural that as a person ages they will need appropriate care. Most have paid health insurance over a number of years and did not resent the reciprocity and solidarity involved,” she said.
In a statement issued this afternoon, Minister for Health Mary Harney said the Government had announced strategy for the private health insurance market last May which addressed a number of issues including competition and financing of the sector.
Ms Harney said the private health insurance market was “very complex “and said there were “no easy solutions.” to making it fair for everyone.
She noted that there was choice in the sector with plans available for consumers of every age group. She added that those with insurance were able to choose alternative insurers without penalties or barriers to switching.
However, opposition parties were also critical of the increases with Fine Gael’s health spokesman and deputy leader James Reilly saying the insurer’s decision to hike its premiums could not have come at a worse time for families.
“Just as the full impact of Budget 2011 is hitting pay-packets and the children’s allowance has been slashed, families are now being asked to pay for the cost of recapitalising the VHI after years of Government inaction,” he said.
“It’s extraordinary that after nearly 50 years of monopoly, the VHI has failed to control medical costs in this country. We need more competition to drive down costs, right across the board,” he added.
The Labour Party’s spokeswoman on health Jan O’Sullivan said the price rises would place huge financial pressure on households who could ill-afford it.
“These increases will lead to situation where many policy holders will reduce or drop their health cover, placing yet more pressure on the public health system,” she said. “The current system is not only inequitable but it is also hugely inefficient and works neither for those who have health insurance, nor for those who do not. It is clear that a complete change is needed sooner rather than later,” Ms O’Sullivan added
The latest VHI increases again remind us that the political system is in fact to blame for this fast becoming second mortgage around our collective necks .As parents we have our hands full with the existing bills and health is a constant worry without having to face yearly hikes like this one.
The crockadiel tears coming from some of the Fine Gail politicians is just laughable as it was one of their front bench that sucked the taxpayers dry by insisting on nearly 250,000 euro salaries for the already overpaid consultants in our hospitals, doctors he was representing at the time when their contracts were been negotiated.
Then we have this former Taoiseach tell us that the political system is crap because minsters are not fully accountable to the Dail.
Great only he never realized this when he was in the driving seat of course.
Then today we have the labor party telling us they want to change politics in Ireland
but Eamon Gilmore can’t even tell you how much a liter of milk costs or a loaf of bread .The point is that the politicians from the established parties do not want any meaningful change, yes they will propose change but letting it up to them , when they will implement change is an entirely different matter.
This seems to me to be a lot of waffle and promises to change that will never happen trying to butter up the voter before a general election
No mention of bringing the crooks within Irish politics to justice or the top civil servants that helped them