The decision by the Tánaiste and Minister for Health not to trigger risk equalisation in the health insurance market appears to be rooted in her wider agenda to attract more private sector investment into the health sector.
Ms Harney referenced the overriding need for a "vibrant health insurance market" several times in the course of explaining her decision.
She did not overtly link this to her objective of encouraging the private sector to build and operate healthcare facilities, but the connection is clear. Those briefing on her behalf stressed that a market dominated by a state owned company, such as VHI, that lacks a clear commercial mandate was not attractive to prospective investors.
While it is hard to fault a politician for taking the bigger picture into account when formulating policy, the suspicion remains that all the talk of a wider agenda is but a smokescreen for a climbdown in the face of intense lobbying from Bupa. The number two player in the market would have been faced with having to make payments of up to €30 million a year to VHI under risk equalisation and had threatened to quit the market in response. The payments reflect the older age profile of VHI's membership.
The biggest weakness in the Tánaiste's case is that the Health Insurance Agency, which regulates the market, was alive to concerns she had expressed about competition, but still recommended the introduction of risk equalisation. In its view, the trade-off between the damage being done to the VHI under the current regime and the encouragement afforded to new entrants has reached a tipping point. They believe consumers will be better served by lower premiums that will flow from risk equalisation.
The Tánaiste is obviously of a different view and has indicated that she is unlikely to change her mind until the playing field between VHI and its competitors has been levelled in other ways. Legislation to address this is due by the end of the year, according to the Tánaiste, but it is unlikely to be a priority for the Government. The reality is that risk equalisation may be several years away.
The Tánaiste is taking a considerable risk by going down her chosen path. Her actions are likely to lead to an increase in premiums as VHI faces the continued loss of younger members to Bupa. This is not likely to win the Government any plaudits from voters.
She also runs the risk that in her determination to foster more competition in the market she may delay risk equalisation to the point where VHI is irreparably damaged and enters a death spiral of rising premiums and rising claims.
Such talk is premature at this juncture and the issue of risk equalisation is reviewed at six monthly intervals, allowing for a reversal of the policy if the arguments, in the Tánaiste's opinion, swing the other way. But there is no cause for complacency. The 1.4 million subscribers of VHI will not thank her if she - or her successor - get the timing wrong.