VHI charges to rise ahead of sell-off bid
EVEN bigger premiums for customers of all health insurance companies are looming following the decision to sell the State-owned VHI to private interests.
The dramatic decision to end State support in the health insurance sector is meant to ensure that elderly and chronically ill people will not have to pay higher premiums than younger, healthier customers, the Government insisted.
And taxpayers will be footing yet another massive bill as they are expected to pump more than €200m into the company to ensure its reserves are sufficient to make it attractive to buyers.
The move comes at a time when significant numbers of people have abandoned private health insurance on cost grounds.
VHI customers are expected to be hit with bigger premiums as the State company comes under pressure to build up its reserves in readiness for its sale.
The Government aims to spread the cost of treating older patients across all the insurance companies -- meaning VHI will be compensated by its rivals.
Customers with Quinn Healthcare and Aviva will not escape as existing private health insurance companies are likely to be under pressure to keep premiums high to build up funds which they will have to transfer to the VHI.
VHI staff voiced concerns about the future of the 900 jobs in the company.
The move comes as VHI prepares to reveal losses of €70m for 2009, weakening the company further and making Government assistance all the more urgent.
The company has €300m in reserves, but it needs to come up with about €520m to pass strict tests set down by the Financial Regulator.
Health Minister Mary Harney insisted neither premiums nor the 900 jobs at the country's largest health insurer would be affected.
"We want to support older and sicker people," Ms Harney said.
Read Dan White, page 14