WITH BUPA's health insurance policies due to take effect on New Year's day, urgent talks will continue with the Department of Health to clarify the legality of some of its products.
The talks are focusing on whether BUPA's cash plans, which are age weighted, contravene the community rating provision of health insurance legislation, which guarantees that all subscribers pay the same premiums irrespective of age.
Meanwhile, the VHI has denied weekend media reports that it is in a financial crisis and will have to increase premiums by 6 per cent every year for three years to remain solvent. "No further increase is being considered at this point in time," a spokesman said yesterday.
In a statement, VHI said it had embarked on a major cost control programme in the last six months and was now trading profitably: "In addition, the company's reserves at the end of this financial year are expected to continue to be maintained at a level in excess of the minimum solvency margin," it said.
"A key factor in the trading position of VHI is that the income level consistently exceeds the level of claims."
In response to weekend criticism of its introduction of age weighted plans, BUPA has mounted a trenchant defence of its product, claiming that its basic Essential Plan is more comprehensive and egalitarian than VHI's packages.
It began discussions with the Department of Health on December 10th last, three weeks before it was due to start operating, on possible "problems" with its product.
According to a spokes woman, BUPA subscribers will have cover in the 73 hospitals with which it has agreements from Wednesday. She Was confident that the problems raised by the Department of Health could be solved.
"They have no problem with the essential plan, nor with the cash plans. There may be a problem if there is a perception that they are being tied together," she said.
She stressed, however, that they are quite separate products and a subscriber can buy" either one without the other, though it may be necessary to change the way they are sold to accommodate this.
"Our product is not anti elderly," said the spokeswoman. You pay the same rate if you're 20 or 60 and it gets you off the waiting list for a heart by pass. Cash, plans are in the market already. The cash is to help you to get into a private room, but you don't have to spend it there.
She acknowledged that the cash plans cost more for older people, but suggested that this could be recouped by not spending the money on additional hospital comfort.
If the Department of Health does not give BUPA the all clear this week, the spokeswoman said its decision would be tested in Europe. "If the game rules are changed we'll all end up in Europe and we'll all be paying for it."
She was also critical of the fact that the Department of Health was both the regulator of the health insurance market and the owner of the major player in the market, VHI.
Asked if she would like to see the roles separated she pointed to the 1994 Kennedy report on the VHI, which recommended that the regulatory function of government should be separated from its role as shareholder, and ideally located in a separate Department or agency.
She acknowledged that the controversy had damaged BUPA's entry to the market, and challenged VHI to "stop complaining and compete".