Membership of the VHI, which was founded in 1957, stayed below 20 per cant of the population until 1979-1980 when, in response to improved public services, the VHI introduced a new benefit package including for the first time full indemnity for hospital bills and maternity cover.
Then came the health service cutbacks, which resulted in spending on hospitals falling by 6.5 per cent in real terms between 1980 and 1986. Worse as to follow in the budgets of 1987 and 1988. By 1989, total health spending was over six per cent lower, and hospital spending was 15 per cent lower, in real terms than 1980.
VHI membership increased rapidly, as people sought to bypass the increasingly inadequate public service. BUPA joined the Irish private insurance market in the 1990s. Today, 45 per cent of the population has private health insurance cover.