VHI to face hearing on 2004 surplus

The VHI's senior management will face questioning before an Oireachtas Committee on whether the recent steep rise in subscription rates and profits were part of a strategy aimed at preparing the State-owned health insurance firm for privatisation.

The chairman of the Oireachtas Committee on Health and Children, Mr Batt O'Keeffe, said yesterday that he would be recommending a hearing on the VHI's recent accounts which saw it record a surplus of around €63 million at a time when subscriptions once again increased.

While he welcomed the healthy VHI accounts for 2004, Mr O'Keeffe said there was a need "to reflect carefully on the basic strategy and assumptions - including premia increases, privatisation and reserving - underlying the VHI's financial projections, taking into account primarily the interests of the consumer," he said.

Mr O'Keeffe said VHI subscription rates had risen by 45 per cent since 2001.

He asked whether it was necessary for the Government to grant a further 3 per cent VHI price increase at a time when the company was announcing significant profits, when membership was at a record high of 1.5 million and total reserves had been dramatically increased to €330 million.

He said that VHI had warned of "dire" consequences if it did not receive €20 million in transfers from a risk-equalisation fund but that the Health Insurance Authority had twice found that this was unwarranted.

VHI's accounts gave no indication of an impending crisis, he argued, asking whether the company "could be accused of preparing for privatisation with callous disregard for its own or future members".