VHI chief executive Vincent Sheridan will meet internal market commissioner Charlie McCreevy today to try to alleviate EU concerns over Government guarantees given to the State health insurer.
The meeting comes as the Society of Actuaries in Ireland yesterday reiterated its position that community rating cannot be achieved without risk equalisation. David Harney, chairman of the society's healthcare and social policy committee, said: "Risk equalisation goes hand in hand with community rating in an open insurance market."
Mr McCreevy recently initiated legal action against the Government over its policy of giving the VHI a derogation from the solvency requirements that have to be met by other insurers. He says this gives the VHI an unfair advantage over its competitors because it doesn't have to show that it has sufficient capital to underwrite its business.
Vivas Health has to maintain reserves of about 40 per cent of subscription income. The VHI's reserves stand at about 23 per cent of income. The legal action followed a complaint to the European Commission by Vivas, one of the VHI's main competitors.
Mr Sheridan is likely to tell Mr McCreevy that the VHI is ready to meet the same solvency requirements laid out for its competitors by a target date of 2012.
Minister for Health Mary Harney set this target date in December 2005 and the VHI wants her to stand by this commitment to give it time to prepare to meet solvency requirements.
However, Mr McCreevy has argued that the introduction of risk equalisation and the fact that the VHI has expanded into other sectors mean the State guarantee should be removed.
Risk equalisation refers to transfers of cash to the VHI from its rivals because of the higher risk profile of its customers.
A VHI spokeswoman said last night that Mr Sheridan wanted to meet Mr McCreevy to address the issues he had raised with the Government regarding the derogation from solvency requirements.
In an interview with The Irish Times last week, Mr McCreevy said he was "very serious" about dealing with the issue. "If I wasn't to do my duty and take on my own member state when it does wrong, then I would have no credibility," he said.
The Society of Actuaries in Ireland said that, even if the number of insurers greatly increased or the VHI's business was split between several insurers, community rating still could not be maintained without risk equalisation, as any such reforms would be unlikely to leave all insurers with similar risk profiles. Although the society says risk equalisation is the only means of achieving a community-rated health insurance system, Mr Harney noted that such schemes could be structured differently.
The current scheme operates retrospectively, but he said the society believed a "prospective" scheme would offer greater transparency and predictability.
