The Quinn Group said yesterday that it will take legal action to overturn emergency legislation that abolished a valuable exemption from risk equalisation payments, writes Caroline Madden.
The legislation, which was rushed through the Oireachtas in February following the Quinn group's acquisition of Bupa Ireland's health insurance operations, removed the three-year exemption from risk equalisation payments to VHI, which previously applied to new entrants to the private health insurance market.
Quinn Healthcare yesterday expressed its disappointment with the Government's response to the Barrington report published this week, which contained proposals on reforming the health insurance market. The company said that it now had no other option but to initiate legal proceedings.
"Other than legislating for a subsection of one of the 12 recommendations in the Barrington Report, and the two previous reports from the Competition Authority and the Health Insurance Authority (HIA), and initiating another endless round of consultations, the Government has not taken any firm action that addresses the impediments to fair competition whilst we are forced to continue to subsidise VHI inefficiencies," the company said.
"We feel we have no choice but to challenge the legality of the emergency legislation introduced."
The company also highlighted its commitment to community rating, a system which guarantees the same premiums to consumers regardless of their age or risk profile. This commitment is illustrated by its price freeze for 2007, the company said, and its plans to increase substantially its market share in the coming years.
However, in a response issued last night, VHI disputed this claim, which it said was contradicted by Quinn Healthcare's "refusal to contribute to the community risk through the risk equalisation mechanism".
The State-owned health insurer also described itself as "demonstrably the most efficient insurer not only in Ireland but also in Europe".
Meanwhile, the Society of Actuaries in Ireland welcomed the recommendations on community rating and risk equalisation contained in the Barrington report.
"We share the view that community rating should be mandatory only in respect of the level of cover that the majority of the insured population has," said David Harney, chairman of the society's healthcare and social policy committee.
