No to Risk Equalization

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DOBBER22

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Dear Mr. Ahern,

I am writing to express my anger and disillusionment at the proposed introduction of risk equalization in the health insurance sector. As a member of BUPA I do not understand why a portion of my annual premium should be used to subsidize another private company ie. VHI. I fail to see the logic of risk equalization in a free market economy. Why should a company like BUPA be penalised for gaining a competitive advantage over one of its competitors. I urge you to think again on this matter and let the market operate freely less we return to the situation where the VHI has a monopoly in the Health Insurance sector. In the long term this cannot be good for the consumer who in the words of one Eddie Hobbs has had enough of this Rip Off republic. By bowing to the bullyboy tactics of the VHI you are merely driving another nail in the coffin of the average hard pressed tax payer of this country who in the words of one Eddie Hobbs is "being ripped off left, right and centre". Taoiseach , 2007 is going to be an election year , listen to the people , forget about risk equalization , we are an intelligent , educated nation , forget about government intervention, let the people decide.

Yours sincerely,

(A concerned voter or maybe your real name if you prefer)
 
I think that risk equalisation makes sense given that private health insurance is community rated. I wouldn't like to see community rating abandoned just to see off risk equalisation. My family are with BUPA too and I expect that our premium will rise when equalisation is implemented but I still agree with it.
 
One thing I've always wondered is what the VHI did with all those premia it got over the many years when its client base was young and healthy? After all, for many years they were the only show in town when it came to private health insurance.

Should it not have foreseen that one day they'd grow old and need more care, and thus made provision accordingly?
 
It seems a bit strange that given the quotes from Eddie "state the bleedin obvious" Hobbs in the OP that the bleedin obvious point to risk equalization hasn't sunk in.
So you'd advocate that a health insurance company like VHI catering for the majority of older people in this country (older people incurring higher medical expenses) should have to compete with a foreign, profit repatriating, blow in who has decided to target primarily the younger (and less medically expensive) portion of the market.
What's your solution for when VHI goes under when it doesn't have enough younger subscribers to balance the older ones. Do you think Bupa will happily take everyone on board in their monopoly or will they ignore community rating and charge higher premiums for older or higher risk clients.
Bupa knew the rules when they entered the market, any of their pre-entry cost analysis would have been based on risk equalization so its a bit late for them to start whinging now. More of your premuim goes to subsidise their foreign operations than goes to ensure that our parents aren't screwed by your idea "competition".
Your attitude stinks, you'll be old too one day and you better pray that the young people of that time are less callous than you are now or what goes around will certainly come around.
 
Health insurance is just another stealth tax brought in because the government in the 70's didn't have the cajones to push ahead with an NHS style system against well organised opposition. We suffer on.
 
Health insurance is just another stealth tax brought in because the government in the 70's didn't have the cajones to push ahead with an NHS style system against well organised opposition. We suffer on.
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Look at the current state of the NHS - prefer to pay for private health insurance than to follow that model!!!!!

I also agree with Risk Equalisation and am with VHI not that it matters. Don't think that BUPA can complain as they knew community rating was part of the deal and thus risk equalisation seems to be part of the parcel to implement this!
 
What is the current state of the NHS? As far as I can see the NHS is far better than what we have over here. Have you ever lived in the UK? Visited a doctor in the UK? Bought perscription medicine in the UK? I presume you have, seeing as how you are of the opinion that you would rather pay health insurance here than use the NHS.
 
"Do you think Bupa will happily take everyone on board in their monopoly or will they ignore community rating and charge higher premiums for older or higher risk clients"

They can't ignore community rating; it is the law.

The problem here is that the "risk equalisation" payment is not transparent. The cost of servicing a particular patient is partly a function of the patient's health and partly a function of the insurer's efficiency.

There is a far simpler solution - The main reason that the VHI has a dispoportionate amount of older customers is inertia. A mechanism could easily be put in place to provide that a percentage of the VHI's customers in the over 50 age bracket should be selected at random and transferred to BUPA, on terms which oblige BUPA to provide identical cover. (there would of course have to be an "opt-out", but I think you would find that most customers would be content to simply let it happen). This would redress the inequality in customer profile, and would leave neither BUPA nor VHI with cause to complain.
 
I am with VHI but I can't figure out why a company with 85% of the market and a nearly 40 year head start can't compete in a market that they dominate.
 
What is the current state of the NHS? As far as I can see the NHS is far better than what we have over here. Have you ever lived in the UK? Visited a doctor in the UK? Bought perscription medicine in the UK? I presume you have, seeing as how you are of the opinion that you would rather pay health insurance here than use the NHS.
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Yes I have....
 
Purple said:
I am with VHI but I can't figure out why a company with 85% of the market and a nearly 40 year head start can't compete in a market that they dominate.
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I'm not too sure about this one either, maybe it had to do with when they were semi-state and profits went into the general budget, don't know if this was the case but it wouldn't surprise me. How much profit would they make anyway given that a one week stay in hospital for one person easily costs more than the yearly subscription for that person it wouldn't take too long for the margins (if any) to be very thin.
 
About 10 years ago a friend of mine moved to the IT department of the VHI from a government department and couldn’t believe the waste and inefficiency. He left before BUPA came on the scene so maybe things are different now but I would guess that maximising profits (or even making a profit) wouldn’t be top of the list in a state owned monopoly.
 
MOB said:
There is a far simpler solution - The main reason that the VHI has a dispoportionate amount of older customers is inertia. A mechanism could easily be put in place to provide that a percentage of the VHI's customers in the over 50 age bracket should be selected at random and transferred to BUPA, on terms which oblige BUPA to provide identical cover. (there would of course have to be an "opt-out", but I think you would find that most customers would be content to simply let it happen). This would redress the inequality in customer profile, and would leave neither BUPA nor VHI with cause to complain.
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Funny, I had a similar thought when reading the debate on this a few weeks back. I wonder would it work i.e. how many of the older customers would be content to get moved or would loads opt out? BUPA would also have to revamp their plans or offer new ones as the cover is not exactly identical.
 
I am with VHI purely because of the plan B options cover which gives access to the blackrock clinic and the mater. My other half had some health problems a few years ago so this cover is crucial. If BUPA have the equiv. plan I wouldn't mind moving although another good point for VHI we get our amount deducted from our salary whereas BUPA don't have this facility...
 
fobs said:
although another good point for VHI we get our amount deducted from our salary whereas BUPA don't have this facility...
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I think this is more likely to be your company not offering the option. I was with VHI for years because it was the only choice I was offered through the company (even though in some cases I was paying for it, not the company). Have now switched to BUPA as the company I'm with will allow either.
 
Janet - you are right it is our company but it is just another point in VHI's favour!
 
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