PMI: Speculation is rife following leaked document to Irish Health Authority
BUPA Ireland has strenuously denied that it is making plans to withdraw from the Irish private medical insurance (PMI) market following the seemingly imminent introduction of a risk equalisation mechanism to the Irish market.
Risk equalisation is designed to redress the balance between BUPA and the Voluntary Health Insurance Board (Vhi), the state-owned health insurance provider with an 80% market share.
Speculation over BUPA's future in the market should risk equalisation come into play, has been rife for some time. This has been heightened following an article in the Irish Times last month, which claimed to have obtained a confidential submission from BUPA to the Irish Health Insurance Authority (HIA) in which the insurer stated: "BUPA would never plan to remain in the market under these circumstances."
Vhi dominates the market, but due to the Irish community rating system, its claims profile is substantially worse than BUPA, who has a much younger client base. Risk equalisation will force BUPA to subsidise Vhi for the greater number of claims it pays out due to its older policyholders, something the British-based insurer is fiercely opposing.
"BUPA Ireland is committed to the Irish market and has taken a case to the European Court of First Instance to ensure competition is protected in the market. We will not leave the market voluntarily; we can only be forced out," said Sean Murray, director of marketing at BUPA Ireland. When asked whether the implementation of risk equalisation would effectively force BUPA out of Ireland, Murray refused to be drawn.
BUPA's pledge to remain in Ireland post risk equalisation has been echoed by Vivas Healthcare, the latest provider to enter the Irish PMI market. Vivas is also opposing risk equalisation and finds: "the notion of forcing smaller players to cross subsidise the largest player is anti-competitive," according to a spokesperson for the provider.
HSA, who has a presence in Ireland through its cash plans operations, has cast doubt on the validity of the claim in the leaked document.
"When you consider the facts, it would not be in the interests of anyone, either BUPA or their policyholders, to pull out," said Jeremy Chadwick, head of public relations and communications at HSA.
See feature on p 26
