The VHI has said it will strenuously argue against a preliminary finding of the Health Insurance Agency (HIA) that could lead to higher premiums for its 1.5 million customers.
VHI chief executive Mr Vincent Sheridan said he was "extremely disappointed" with the HIA decision in relation to risk equalisation. "It is a fact that without risk equalisation the Irish public are forced to pay higher premiums for their healthcare."
The risk equalisation scheme is designed to compensate one insurer when it has a significantly higher customer risk profile than its rivals and is therefore likely to face higher claims. The HIA has produced a preliminary finding that the scheme should not be activated. Activation could - it has been estimated - lead to up to €20 million a year being transferred from BUPA to VHI.
A final decision will be sent to the Minister for Health, Mr Martin, by the HIA after a 21-day period during which interested parties are allowed respond to the preliminary findings.
"VHI has pledged that any risk equalisation receipts would be solely devoted to reducing the rate of future premium increases," said Mr Sheridan.
"We will make strenuous representations to the HIA over the next three weeks and seek to convince it that the appropriate circumstances do exist and have existed for some time for the operation of a risk equalisation fund."
The HIA said that following analysis of detailed information from insurers, it had decided the current level of risk difference between insurers was above 2 per cent and below 10 per cent. This meant the authority was obliged in law to make a recommendation to the Minister. If the difference was above 10 per cent, the scheme would definitely come into effect.
The HIA receives accounts from the health insurers every six months and keeps the issue under review.
Labour's spokeswoman on health, Ms Liz McManus, said the HIA decision should not lead to an increase in VHI premiums which, she said, had increased by 50 per cent since 2001.
BUPA Ireland has said it will continue to press its case in the European Courts challenging the risk equalisation scheme as a form of State aid. The European Commission approved the scheme, but BUPA has appealed to the European Court of First Instance, in a bid to end the scheme once and for all.
