Health service union Amicus today urged Tánaiste and Minister for Health and Children Mary Harney not to give in to Bupa's threat to withdraw from the Irish market.
Amicus National Secretary John Tierney condemned Bupa's reaction to the Health Insurance Authority's recommendation that risk equalisation be introduced into the Irish market, as "a childish tantrum".
Bupa Ireland, the second largest health insurer, has said it will be forced to exit the market if risk equalisation is introduced.
Risk equalisation is designed to compensate companies such as VHI, which have older and more vulnerable members, to allow them to compete with companies that have younger members and so fewer claims.
Mr Tierney said a report recently prepared for his union shows that the Irish health insurance market is inherently unstable. He said this is due to the failure to introduce risk equalisation and could lead to premium increases that would be prohibitive for the vast majority of employees, as well as increases of 600 to 700 per cent for older subscribers.
Liz McManus, the Labour Party's spokeswoman on health, said Bupa Ireland was aware of the risk equalisation system when it entered the Irish market.
"The legislation was originally enacted in 2001 and indeed the delay in applying the provisions of the Act has created serious problems for VHI and has contributed to the significant increases that VHI members have had to face."
"The threat by Bupa Ireland to pull out of the Irish health insurance market if it is required to meet its obligations to risk equalisation... is a crude attempt at political and financial blackmail, "Ms McManus added. "The regulator and the minister should call their bluff."
The Tánaiste has 60 days in which to make a decision on whether to introduce risk equalisation, and health insurers have 21 days to make submissions.