VHI says 9% increase will cause loss of few members

VHI says it expects to lose "very few" members to its British-based health insurance rival, BUPA, as a result of the 9 per cent…

VHI says it expects to lose "very few" members to its British-based health insurance rival, BUPA, as a result of the 9 per cent rise in subscription rates, which takes effect from Monday.

The VHI increase, sanctioned by the Department of Health, is the largest in the company's history.

The reason for it, according to a spokesman, is the rising cost of claims, which now amount to 98.4 per cent of premium income.

Yesterday VHI announced a 14 per cent increase in the number of new members between March and August over the same period last year.

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According to the company new members have been joining at an average of over 1,100 per week, the greatest increases being in Plan B.

From Monday any subscriber renewing a VHI policy will have to pay 9 per cent extra. A source in the VHI said yesterday, "It will not be long before BUPA will have to increase their subscriptions."

The national executive of SIPTU criticised the VHI increase. All five VHI plans will be affected, with the new annual rate for a married couple with two children varying from £484.64 a year on plan A to £2,064.74 on plan E.

VHI said that the ageing of the population would continue to cause increases in subscriptions.

In detailed figures released yesterday the company said demand for membership among young people was increasing. Evidence of this was that while new membership was up 14 per cent, new policies issued were up 21 per cent. A statement said this "highlighted the number of single adults taking out VHI for the first time."

According to the company, membership now stands at a record level of 1,433,871, or 40 per cent of the population.

BUPA does not give figures for its membership, but it is understood it stands at around 30,000.It began trading in Ireland in January. Most new customers are on the essential plan scheme, BUPA's equivalent of the VHI's plan B.

A spokeswoman said BUPA would become much more attractive following Monday's increase in VHI rates. "We believe our benefits are much more attractive with no balance bills."