Seán Quinn's attack on the VHI prompted sharp exchanges yesterday after the State health insurer went on the offensive to accuse Bupa's new owner of making "totally inaccurate" claims about its business.
VHI chief executive Vincent Sheridan implicitly rejected Mr Quinn's claim that his company set out to lose money after years of profitable growth in order to boost its case for risk-equalisation payments from Bupa.
"The only thing I've got to say to that is to repeat what I've always said. You cannot have community rating without risk equalisation. In our particular market, without risk equalisation VHI would not be viable," Mr Sheridan said. "The principle of risk equalisation being essential has been accepted by everyone, the Government, the Health Insurance Authority and the High Court. I have no wish to get into a debate about that, because that debate is over."
Quinn Group rejected such remarks as "rubbish", saying the risk-equalisation debate was not settled. "It's not. There are a number of legal challenges. Why else would the Government have set up the Barrington committee to report on it?"
VHI rejected each point made by Mr Quinn at a conference in Co Cavan and Quinn Group in turn dismissed the points made by the State company.
"The financial losses incurred by VHI Healthcare directly resulted from operating in a community-rated market without risk equalisation," it said. "The inevitability of such losses was long-predicted. The other insurer operating in our community-rated market without risk equalisation received a 'regulatory subsidy' and made huge windfall profits."
But Quinn Group cited an Irish Independent report from April 2004 which said that the VHI had warned the Government that it was "prepared to go bankrupt rather than charge the premium increases" it needed to survive.
Mr Sheridan made no direct comment on that. But the VHI said in response that it decided in 2004 to take lower premium increases so that its clients would not be penalised for the absence of risk-equalisation payments.
