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How will the recent developments on Risk Equalisation affect me?

Over the Christmas holidays there have been significant developments within the Irish health insurance marketplace that have the potential to change the way this market operates in the future.

Essentially, the Minister for Health and Children on the advice of the Health Insurance Authority (HIA) has decided to trigger the much talked about Risk Equalisation payments scheme which has been designed to act as a system which collects money from health insurers in Ireland with a lower age profile and claims experience and then pays this money over to health insurers with an older age profile and subsequently a higher claims experience, therefore equalising the risk.

Based on the current profile of health insurance members, this would mean a flow of funds to VHI from BUPA Ireland.

Owing to the current legislation, VIVAS Health who opened for business in October 2004 has an exemption from payments into any risk equalisation fund until 1 January 2008.

BUPA Ireland’s challenge to the triggering of the Risk Equalisation payments from 1 January 2006 has been unsuccessful but they will not have to pay anything into the fund until their court case on the legality of risk equalisation in the High Court due to start on 7 February 2006 is decided upon.

As the BUPA Ireland court case could potentially take 2 to 3 years to decide what should companies and individuals do in the interim with regard to their health insurance choices?

Firstly it is worth pointing out, whilst not in any way suggesting a switch of insurers, that health insurance in Ireland is a very heavily regulated market and that as per the Health Insurance Act of 1994 all registered insurers in Ireland must accept members from other registered insurers and essentially give them credit for the years of insurance served with their previous insurer eg any waiting periods served count with your new insurer.

Although much will depend on the course of action BUPA Ireland take in the near future we believe that in the short term the market will not change significantly.

In the medium to long term it is clear that the system of health insurance in Ireland has the potential to change significantly with the pending court cases, risk equalisation payments etc and it is therefore our intention to keep our clients up to date on developments in this area as they happen.

We would be delighted to meet with you to discuss your current situation and advise you constructively and independently on the choices and courses of action open to you in the short and long term.

If you would like to find out more about the differences or to obtain independent comparisons between the different providers and plans available in the Irish health insurance market please contact Aongus Loughlin.