Bupa charges set to increase by 10%

Bupa Ireland's 600,000 members are facing increases in subscription rates of close to 10 per cent on average. The private health insurance company will inform members of the increases in the next few days.

Sources said that subscription rates would increase by 9.5 per cent on average. However, the cost of the insurer's least expensive plan - Essential - will rise by 6 per cent. The increases will come into effect from March.

It is expected that the company will point to rising costs, particularly the decision by the Government to increase the cost of private beds in public hospitals.

Last September, the VHI increased its subscription rates by about 12 per cent on average for its 1.5 million members.

Bupa indicated earlier this month that it was considering limiting the level of increases for those on its least expensive plan in an attempt to keep health insurance cover at affordable rates.

It is expected to maintain that the increases have nothing to do with the recent decision by Minister for Health Mary Harney to trigger risk equalisation. This could result in Bupa having to pay tens of millions of euro to its rival, VHI. Bupa is to launch a challenge to the risk equalisation scheme in the High Court next month.

The regulator for the sector, the Health Insurance Authority, last year claimed in a report to Ms Harney that Bupa was making "supernormal" profits in Ireland. The company has strongly rejected this charge.

VHI chief executive Vincent Sheridan yesterday wrote to subscribers expressing surprise at Bupa's challenge to risk equalisation. He pointed out that Bupa competed in Australia, where such a system existed. VHI is to be a party to the court proceedings.