At least 50,000 VHI members could be forced back into the public health system within a year if the organisation is privatised, according to a senior trade unionist.
MSF's regional officer, Mr Brian Gallagher, is seeking an urgent meeting with the Minister for Health, Mr Cowen, to seek assurances that the statutory health insurance body is not to be privatised. He is also seeking a £70 million investment by the Government to maintain the VHI's long-term viability.
Mr Gallagher, who represents 330 of the VHI's 360 staff, said yesterday that "privatisation of the VHI would be bad for the consumer, bad for the economy and, of course, the company's employees".
"Independent consultants have estimated that this course of action would lead to an immediate price increase of 20 per cent for VHI products, and an annual increase of 11 per cent thereafter."
He said because the VHI was a not-for-profit organisation, all the premiums collected went towards providing health cover for customers. On this basis, the VHI had a derogation from the normal liquidity ratios applied to commercial operations by the European Commission. It was now grossly undercapitalised.
He estimated the VHI would need £70 million to meet EC criteria if it was privatised. The cost of funding this would mean premiums increasing by 20 per cent in the first year and being locked into the spiralling rates of medical inflation after that.
"Existing customers of the VHI have made a major investment over many years in order to provide for their own future medical needs. It would be an outrage if their investment was undermined because of the failure of the Government to make a once-off injection of funds."