The VHI has expressed concern over the takeover of health insurer Bupa Ireland by Quinn Group.
VHI chief executive Vincent Sheridan said Quinn Group's claim that it is entitled to a three-year exemption from risk-equalisation payments as a new insurer in the market led to "stark and inescapable" conclusions regarding the future of the health insurance market.
Speaking on RTÉ radio this morning he said: "If the Quinn interpretation is correct . . . community rating could not survive, and the door is wide open to the massive hit-and-run type of activity.
"It is major issue and one that needs immediate clarification and government action."
Risk equalisation is the system to compensate State-owned health insurer VHI for higher age profile of its customers.
Minister for Health Mary Harney said she welcomed the takeover and was pleased that Quinn will keep all of Bupa Ireland's customers. She said that if there were any deficiencies in the risk-equalisation scheme she would address them.
She said: "If after three years you could switch ownership and not have to meet risk equalisation liabilities, that wouldn't be a robust system".
Although Amicus, which represents 800 workers at VHI, has welcomed the saving of the 300 Fermoy jobs, it has expressed its concern that the new entity will not be required to contribute to risk equalisation.
"Our members at VHI have made great sacrifices over the last number of years," said Amicus regional officer Colm Quinlan.
"We are lauded as having created one of the most efficient health insurance companies in the world. We have done so on the basis that community rating, the fairest method of health insurance, be supported by risk equalisation.
"If new entrants are allowed to undermine that, it will be a dark day for all but the youngest and the fittest in the State. We urge the Minister for Health and the Health Insurance Authority to clarify this matter with all possible haste."
