Risk Equalisation Health Insurance

mike65

flogen wrote:

Did they really? How exactly?
I'd imagine that risk equalisation was a Fianna Fail/PD initiative, right? Well, I'm sure they're happy to take the credit for it anyway.

Nope the policy was designed in 1996, during the Rainbow Coalition, when the legistation for health insurance competition was written.

Mike.

jesus_thats_gre

MrPudding wrote:

Is it not Australia?

MrP

Could be - just has a quick read of an article..

flogen

mike65 wrote:

Nope the policy was designed in 1996, during the Rainbow Coalition, when the legistation for health insurance competition was written.

Mike.

Could it not be possible that BUPA were already set up (or mainly set up) before the policy was announced, even if they hadn't officially launched. And surely after a change of government and 9 years (which is far too long for any type of policy to be enacted), they thought it was dead in the water?

mike65

I made an error on the legistation year, it was 1994 not 1996 (which is when BUPA arrived here).

You can read the vhi document on risk equalisation etc here.

Mike.

flogen

mike65 wrote:

I made an error on the legistation year, it was 1994 not 1996 (which is when BUPA arrived here).

You can read the vhi document on risk equalisation etc here.

Mike.

Ok, after a little bit more reading on the topic I can finally see how this all came into being, so the reasons for its delay and the year of its inception is all fair enough.

Now, what is the basis of which Bupa will pay out? Is it based on their earnings or VHI's losses (or lack of profits)? If Bupa is to be believed they have only made €70 million in Ireland to date, and Risk Equalisation would cost them €30 million (I don't know if this is per year or what...)

LostinBlanch

OK call me cynical but I find the fact that there is an approaching general election central to this. Every vote is going to be crucial (especially for the PDs as they hardly top the polls in their constituencies, with one or two notable exceptions). Even the Bould Michael and Mary scrape through to get the last seat or second last if they are lucky. Now older people tend to vote more than younger ones so such a move is going to appeal to the grey vote and may be the difference between Michael and Mary's seats being saved or not.

Why else would the leader of a party that believes in economic liberalism and the freedom of the market to cure all ills (social, economic and otherwise) do such an abrupt about turn?

Why else would a party whose president states publicly that he believes in inequality suddenly force the market to acquiesce to such gevernmental controls against the markets own interests?

Answers on a postcard to . . . . . . .

netwhizkid

I hope that Miss Piggy is demoted from the Dail, Private health Insurance shouldn't even exist that thought that the rich can get better treatment than the common Proletariat, It is a thundering disgrace that the PDs even exist. Mary Harney has alot alot to answer for and I hope she loses her seat in the next Election. The ejits that vote for her deserved to get screwed over.

flogen

http://www.rte.ie/news/2005/1228/health.html

The health insurer BUPA has told the High Court that it will unequivocally withdraw from the Irish market if the risk equalisation scheme is found to be valid.

Under the scheme, other health insurers would have to compensate the VHI because it has an older and less profitable customer base.

Counsel for BUPA, Michael Collins, told the court that if the scheme is implemented on 1 January, BUPA could incur a liability of €161m against a projected profit of €64.

If those figures are corrent then Risk Equalisation is an absolute joke, however I wouldn't be too quick to believe it until an independent source backs it up.

Boston

Cork wrote:

BUPA knew of risk equalisation before they set up here.

It should not be news to them.

Mary Harney is 100% correct on this one.

What? They are allready in the market years. Risk equalisation was no in the market when they arrive. Of course they knew of the concept, but that doesn't mean they should accept it. No oen said a condisiton of enterign the market was to accept equalisation. With this measure there would be no incentive for VHI to lower there rates and become more effecient. Why should they have to cut costs and get value for money when any shortfall then encoure will just be transferred to their competition. Are you indifferent to the amounth of waste and bad practise in the medical profession? This is no a solution to it, merely a way to allow it to continue.

jd

High Court rejects BUpa application
http://breakingnews.iol.ie/news/story.asp?j=167405308&p=y674x6xy4

daveirl

This post has been deleted.

Calina

daveirl wrote:

This post has been deleted.

I have BUPA too, and frankly, it galls me that the mandatory health insurance that I paid less for in Germany 10 years ago covered me for far more than the private health insurance I have in rich, wealthy ireland now.

daveirl

This post has been deleted.

Cork

netwhizkid wrote:

I hope that Miss Piggy is demoted from the Dail, Private health Insurance shouldn't even exist that thought that the rich can get better treatment than the common Proletariat, It is a thundering disgrace that the PDs even exist. Mary Harney has alot alot to answer for and I hope she loses her seat in the next Election. The ejits that vote for her deserved to get screwed over.

Pat Rabbit is no oil painting - Can I make some comments on his appearence?

I have health insurance myself. I feel that it is better to have it than not.

That is my choice.

Risk Equalisation adds fairness to the system. BUPA knew about it before entwering the market. If they want to drag it out in the courts - it is their choice.

mayhem#

Mary Harney's idea is completely ludicrous.
The state has made a complete mess of the public healthcare system in this country and now it starts to meddle with private healthcare?!
I would love to see this end up in the European courts. They wouldn't stand a chance...

E.

LostinBlanch

Cork wrote:

Risk Equalisation adds fairness to the system. BUPA knew about it before entwering the market. If they want to drag it out in the courts - it is their choice.

PDs in equality now a good thing shock. I wonder has anyone told Michael? :rolleyes:

This is a decision taken to protect government seats in the short term until the next election. We will be left to pay for it in the long term just like that other roaring success decentralisation. I wonder how they are doing in Parlon Country?

So Cork what PD cumman are you in? if you don't mind me asking that is.

LostinBlanch

LostinBlanch wrote:

So Cork what PD cumman are you in? if you don't mind me asking that is.

LoL you havent been around here long have you

LostinBlanch

Earthman wrote:

LoL you havent been around here long have you

Does it show that much? :eek:

flogen

LostinBlanch wrote:

Does it show that much? :eek:

Cork is a FF'er, not a PD man/woman. But given that Harney has the support of FF in her actions, it's all the same here.

gandalf

Risk Equalisation makes sense tbh, but proping up a inefficiant Semi State Body whose cost base is too high isn't. I think this is the crux of Bupa's arguement. If the VHI want this they should be privatised and made operate in the real world. By the sounds of it they want their cake and they want to eat it. Until this happens risk equalisation shouldn't happen.

Maybe this is the way forward

http://archives.tcm.ie/businesspost/2005/02/06/story2179.asp

VHI board could opt for mutual status
Sunday, February 06, 2005 - By Cliff Taylor
The board of the VHI is believed to be in favour of turning the health insurer into a mutual organisation, owned by its 1.5 million members, The Sunday Business Post has learned.......

or maybe this frees the governments hands to sell off VHI at a good price

http://archives.tcm.ie/businesspost/2003/08/24/story417993946.asp

VHI sell-off hit by Bupa court action
Sunday, August 24, 2003
By Kathleen Barrington

VHI's privatisation ambitions have been dealt another serious blow. Rival health insurer Bupa is challenging a European Commission decision that could have forced Bupa to transfer about €36 million to VHI.......

Interesting times ahead methinks (and alot of lawyers are going to get rich!).

LostinBlanch

Flogen thanks for putting me right. I was taken in by Corks rabid defense of anything PD in this and other threads. But seeing as the PDs are FF by proxy, doing FF's dirty work it makes some kind of sense. :rolleyes: Has anyone seen that broken mould? :rolleyes:

gandalf wrote:

Risk Equalisation makes sense tbh, but proping up a inefficiant Semi State Body whose cost base is too high isn't. I think this is the crux of Bupa's arguement. If the VHI want this they should be privatised and made operate in the real world. By the sounds of it they want their cake and they want to eat it. Until this happens risk equalisation shouldn't happen.

or maybe this frees the governments hands to sell off VHI at a good price

http://archives.tcm.ie/businesspost/2003/08/24/story417993946.asp

Gandalf don't tell me that you think the huge increase in premiums was only to cover costs and not to inflate the books in order to get a better price for privatisation? Of course that'll mean that it'll be the poor subscribers who are paying for it again, and again and again.

gandalf

LostinBlanch wrote:

.....
Gandalf don't tell me that you think the huge increase in premiums was only to cover costs and not to inflate the books in order to get a better price for privatisation? Of course that'll mean that it'll be the poor subscribers who are paying for it again, and again and again.

Nope you could be right but I actually doubt it. From my dealings with the VHI directly or indirectly in my line of work there is a civil service type mentality in place that leads me to believe there is alot of wastage and inefficient work practices in that organisation.

Then again you could be right, 2 years ago floating VHI was worth at least €300 Million to the Government, so its not inconceivable that they could be doing a bit of padding as well with this in mind.

LostinBlanch

Oh I'm more than likely to believe you about civil service mentalities and inefficient work practices. But the cynic in me says that this goevernment is so out of touch that they feel they can do literally anything and get away with it.

Wasn't it Mary Harney* who said "people have short memories" about the Sheedy affair? And she was talking about her own constituents! But then again she got elected again so maybe she was right.

*This is not just directed against the PDs but is the first example I could think of. Bertie the socialist is just a bit too cute to come out with such a statement (so far anyway).

Cork

LostinBlanch wrote:

I was taken in by Corks rabid defense of anything PD in this and other threads. But seeing as the PDs are FF by proxy, doing FF's dirty work it makes some kind of sense.

Health Equalisation has been with us for over 10 years. What Mary Harney is doing is implementing it. Companies with an older set of members should be compansated as older people tend to require more health services than the younger crowd.

I personally am not a member of any political party. I attended a couple of meetings during 2005. I actually voted for the Green Party at the last local elections. As I knew the canidate.

Health Equalisation is not unique to Ireland. I have not seen any opposition partys coming out aganist the concept.

Hobbes

I have VHI and TBH I Find this thing totally stupid. Maybe VHI should see about cutting some fat, working better plans to draw in younger people. Also they up thier rates this year, kind of cheeky if they are expecting to basically get the other companies profits.

MrPudding

Cork wrote:

Health Equalisation is not unique to Ireland. I have not seen any opposition partys coming out aganist the concept.

The main market where this is mentioned is Austrialia. I really don't think the comparision is good though.

Ireland has 3 insurers, 4 if you count ESB. The dominant player, VHI, holds around 80% of the market.

Australia has 26 or 28 insurers and the largest market share is less than 30% and that is a private comapny, BUPA I believe.

That is a huge difference. How does risk equalisation seem correct in this environment? Did Ryanair have to pay Aer Lingus cos they were a monolithic semi-state? No, Aer Lingus cut cost and became competitive.

I think only part of VHIs problem is the older people. You have to think that as a semi-state they have plenty of fat that could be trimmed to bring down operating cost.

Why did VHI not offer their over 65 subscribers the option of moving to a competitor or providing the competitor with there details in order to try to get them to move? This was, apparently, requested by Viva. It seems to me the Viva and Bupa would rather increase the number of older less profitable subscribers rather than make forced payouts.

If they believe they can make money with higher numbers of older people then they obviously feel the increased payouts is only part of the profitability problem. I reckon they believe they will be able to continue to make money as they run a lean efficent operation. Profit will probably be down but still possible.

MrP

MrPudding

Hobbes wrote:

I have VHI and TBH I Find this thing totally stupid. Maybe VHI should see about cutting some fat, working better plans to draw in younger people. Also they up thier rates this year, kind of cheeky if they are expecting to basically get the other companies profits.

Apparently they have also said that they will not reduce premiums after any equalisation payout.

MrP

Cork

Older people would also have medical cards so the state would be picking up a lot of their health expenses.

So, are the amounts involved with risk equalisation even accurate?

Are they just hyped up?

LostinBlanch

Cork wrote:

I personally am not a member of any political party. I attended a couple of meetings during 2005. I actually voted for the Green Party at the last local elections. As I knew the canidate.

I stand corrected.

CORK wrote:

Health Equalisation is not unique to Ireland. I have not seen any opposition partys coming out aganist the concept.

Like Mr P said the example used is Australia which actually has proper competition unlike us. Also if it is fact that they won't be reducing premiums even with risk equalisation then I think that the VHI will be privatised with the money going onto whatever project Bertie wants to waste money on this time. I mean €1.3 billion for the Port tunnel? and it's still leaking :eek: How much did the Jack Lynch tunnel cost?

Cork

LostinBlanch wrote:

Like Mr P said the example used is Australia which actually has proper competition unlike us. Also if it is fact that they won't be reducing premiums even with risk equalisation then I think that the VHI will be privatised with the money going onto whatever project Bertie wants to waste money on this time. I mean €1.3 billion for the Port tunnel? and it's till leaking :eek: How much did the Jack Lynch tunnel cost?

I would agree with the need for competition. Bloated state monopolies are as bad as privatised ones. It is funny that with the introduction of a Cork to Dublin Bus service did Bus Eireann cut their fares on the route.

The atitude to buylding projects has changed in this country to one of fixed price contracts. This has been long over due.

The problem with the health insurance market is that the young and old are charged the same. This does not apply to the car insurance market.

So, a mechanism is needed to ensure a health insurance company does not cherry pick the younger and more profitable customers.