The State's two largest private health insurance companies have issued widely divergent responses to the increases in the health insurance levy, with the VHI welcoming the move and Quinn Healthcare condemning it.
The VHI said it would not be passing on the cost of the levy to its customers and claimed it was set up by the Department of Health to be cost-neutral.
"Money effectively moves between younger and older customer and does not cost the industry any additional money," a spokeswoman said. "The measure does not favour one company over the other – all health insurers are treated equally . If other insurers are cherry picking younger customers, it may impact them."
Quinn Healthcare, which has around 400,00 customers, most of whom are in a younger demographic, expressed its extreme disappointment at the Government’s decision and described it as “bad news for consumers”.
Its customers would now continue “to subsidise the inefficiencies of the unregulated VHI and those customers on the lowest level schemes continue to carry a disproportionate burden of the health levy”, it said.
“Such dramatic changes to the health levy were not anticipated and, as usual, it is families and those on the lowest level of cover that will be most affected,” managing director Dónal Clancy said.
He said Quinn Healthcare worked hard “to ensure that costs are kept as low as possible; however, such significant increases are difficult to absorb. Undoubtedly even more people will be forced into a public health system which is already buckling under intense pressure.”
However, the VHI said it was “a step in the right direction towards the implementation of a proper risk equalisation scheme to underpin the social policy of community rating”.
Chief executive Declan Moran said community rating was intended to ensure the cost of health care should be shared proportionately by everyone who was insured. He claimed a "robust and effective risk pooling system is absolutely essential to protect community rating and support older customers. As the Government moves toward the implementation of a universal health system this is an absolute imperative".