Risk Equalisation

Does that affect me? The answer could be ‘”Yes”. ‘If you are old/suffering from a long-term medical condition then this week’s ruling in the Supreme Court could well end up costing you a great deal more for health insurance cover.

Risk equalisation is a scheme to ensure that community rating is implemented whereby everyone, young and old, sick or healthy, pays the same premium. It is a scheme that provides for insurance companies with fewer elderly subscribers to compensate other companies who have higher numbers of medically vulnerable subscribers. This week, the Supreme Court struck down legislation which our government had in place to ensure that risk equalisation was enforced. Up until now, this legislation placed restrictions on other insurers thereby restricting competition within the private health insurance market. The VHI is the longest serving health insurance provider and carries the largest number of elderly customers. It currently holds a monopoly with 70 percent of the health insurance market and as the state insurer, was protected up until now by risk equalisation. This week’s decision is without doubt, an embarrassment for the government and it may have serious consequences for the VHI and it’s subscribers. A more detailed explanation of the situation can be found here in this week’s online edition of The Irish Medical Times.

Competition is good but a balance has to be found whereby those most vulnerable in our society are not squeezed out of the private health insurance market. This latest development potentially represents a big upset to our Minister for Health’s plans to privatise the health service. Her future in the Department of Health, is looking more than a little bleak.

12 Responses to Risk Equalisation

  1. Ellie says:

    I think a lot of this is media spin about how VHI now having to actually compete will drive up prices, rather than allow Quinn and VIVAS to offer competitive rates now that they won’t be financially raped by the State. The State doesn’t protect VHI for nothing, you know, there is spondulicks in it for them. Hence the media with the violins-of now the sick and elderly won’t be able to afford care. Bollocks-they can go with Quinn or Vivas now and probably get a better deal.
    I was with VHI before, they cover your private op but not your anaesthetist etc, whereas BUPA/Quinn cover everything! And surely, we should focus on improving the public health system for the sick and the elderly, as it is where most of them will end up anyway. The private system does not “do” emergencies, out of hours, complex medical co-morbidities etc. Hence the most vulnerable will be more likely to end up in public teaching hospitals where their insurance entitles them to little more than a semi private room (if one is available) and maybe an early clinic date. Let the affluent youthful middle class people go have their ops in the private hospitals, and hence reduce the lists and strain on the public system. I welcome the decision-it was wrong of VHI and the State to keep down competition so they can do as they please and charge what they like.

  2. Ellie says:

    the thing is, VHI moan and whinge that they have all the elderly sicker patients-well this is why! That is the group of people least likely to change over or shop around. They would have an increase in young people who shop around if they offered more competitive rates and deals.
    Though personally I would go without insurance and wait for years rather than EVER use VHI again, that is just my own personal experience of it. Long live choice!

  3. Ian says:


    Maybe the abolition of risk equalisation will bring the advent of a proper socially funded health care system

  4. Steph says:

    Ellie – Thanks for that.

    The situation which you outline so well as regards elderly people requiring hospitalisation, is very real for me at the moment. I’m struggling to find urgent specialist care for my 80-year old mother who is bed bound in a nursing home. She has basic VHI insurance but it’s no use to her as the private system doesn’t facilitate urgent admissions without a consultant referral. I’m faced with having to put her through the ordeal of A&E in order to get her assessed 😦

    I’m sorry to hear of your experience with the VHI. I have to say, I’m surprised to hear that they didn’t give anaesthetic cover? I thought all anaesthesia charges are covered whether you’re an in-patient or a day case, no matter what plan you’re in. No?

    You needn’t worry, I’m no fan of the VHI either as they’ve given me a fair amount of grief over the years but it gives me pleasure to add that they’ve never made a profit out of me! I often wonder when I ring up the VHI with a query, if a warning flashes on their computer screen saying “Look out! Here she comes again!” 😉

    Ian – Hi!

    All I can add is that this development represents another nail in the coffin for Mary Harney’s plans to privatise healthcare. If this means that her plans will have to be scrapped, then I’m more than happy 🙂

  5. Ellie says:

    Hi Steph,
    no VHI cover private anaesthetists absolutely at their own discretion-this particular one they decided not to pay. This was a few years ago-think I was twenty at the time. Fortunately my dad takes no crap, got a lawyer to send them a letter gently reminding them they had a contract with him to pay for what they said they’d pay for, and the resultant litigation if they didn’t. They ponied up in the end, about two years later.
    What insurance companies do and what they say they do are two really different things. My partner recently needed something fairly urgent done-another Irish insurance company this time-different part of the world-and I was bloody glad I was a medic, as they were saying they may not cover and hemming and hawing. I put it to them, ehm, somewhat bluntly, in terms they would not be able to medicolegally refuse, and they called me to say they’d be covering the very next day. I don’t know how people with no medical training fight those battles though. I was so stressed about it and worried about him too. Having insurance doesn’t give me ANY peace of mind anymore-the whole damn world is becoming like Michael Moore’s Sicko. They refuse things on a whim or technicality and get away with it if you let them.
    We need our governments and ultimately, our people, to recognise that care for the sick, injured and dying needs to be provided to citizens as a matter of priority according to need, not bank balance. That is what I love about NZ. Healthcare here is the most important thing in the country. Doctors and nurses are well respected and valued and shown that they are. Massive amounts of funding are allocated towards looking after their society’s most vulnerable. Yes, taxes are high, but there is a high quality safety net for everyone in the country. I don’t mind paying for that.

  6. Ellie says:

    There are also huge amounts of Government funded home help here, district nursing, physio, OT, SALT etc are all paid for by ACC when someone needs it as a result of illness and no long waiting lists as they hire as many staff as they possibly can and pay them just so they’ll have them when they need them. I have seen some people get home nurse visits up to four times a DAY every day and home help on top of that, in an effort to preserve their independence and dignity. All State funded. Ireland has a long long long way to go.

  7. Mike says:

    Sorry to hear about your mother Streph
    Its a terrible situation where you have to resort to the truama of an A&E admission to get care for your mother.
    The healthcare system need an urgent shakeup. Co located hospitals are not the solution however
    I hope tour mum gets the medial care she deserves a a citizen of the state soon

  8. Steph says:

    Hi again Ellie

    I can honestly say that when I learnt I had to have surgery in the UK last year (as op not available in Ireland), the biggest source of stress leading up to the op was my dealings with the VHI. They turned me down on funding despite the referring surgeon completing all the necessary paperwork and also providing statistics to show the efficacy of the procedure. Their explanation? A box with a tick in it saying we hadn’t fulfilled their criteria. When my surgeon challenged their logic, they immediately reversed the decision! I choose to spend my money on health insurance rather than treating myself to a nice annual holiday. It really smacks in the face when they then turn around and say “bad luck” when you need them most!

    I’m very jealous of the set-up in NZ. I have close family living there and could be sorely tempted to uproot and join them in the future.

    You may be interested to read this piece on risk equalisation from the Irish Times.


    Hi! Mike and thank you for your thoughts on my mother. She is very well looked after at the nursing home and doesn’t need to be in hospital. All she needs is a specialist to oversee some investigations for her. She’s not well enough to wait for an out-patient appointment so we are faced with transferring her to A&E for assessment and this will probably result in her being admitted after spending days on a trolley.

    It’s a disgrace what older people are subjected to when in need of help. The private system is a closed shop when it comes to urgent care unless you’re already in the system or you know someone with pull. Elderly people deserve better.

  9. Mike says:

    Hi Steph
    I’ve been there also with my own mother-days on end on a A&E trolley…no dignity no privacy. Im not having a go at the A&Estaff-its the system that sucks
    Cuba has a better healthcare system than we have here

  10. Steph says:


    I’ve been in A&E myself many times over the years, and I’ve seen too much of what goes on there. As a regular, I’m lucky in that I get processed fairly quickly.

    You might be interested to read this post:

    However when I accompanied my elderly father to the same A&E department not long ago, he ended up spending 3 days and nights on a trolley. His confusion was 100 times worse by the time they’d decided not to admit him and sent him back to the nursing home. I’m trying my hardest to avoid putting my mother through the same ordeal.

  11. Knipex says:


    The Times piece has me slightly confused.

    My understanding is that risk equalisation and community rating are two separate issues covered under separate statutes.

    Community rating is unaffected by the supreme court decision so it is still illegal to discriminate between customers based on age or Health. The net effect will be that companies with a higher percentage of elderly or long term sick patients will have higher prices (for all customers) than those that don’t. This will put the VHI at a severe disadvantage as they have a higher percentage of these customers than their competitors.

    I also understood that the ruling was more to do with the way the payments were calculated rather than the payments rather than risk equalisation its self.

    Community rating is here to stay and Harney is on record as saying that more than once.

    It will be interesting to see what solution they do propose though.

  12. Steph says:

    Knipex, Hi!

    I agree – the situation is very unclear. We’ve been led to believe that community rating cannot survive without risk equalisation in operation. Now that Harney has had that rug pulled from under her feet, we are being told that community rating is no longer secure. VHI has stated that it’s customers have been financing community rating alone to date. If that’s the case, why is the abolition of risk equalisation such bad news? Others believe that with risk equalisation gone, Ireland can develop it’s health insurance market and more competition could drive drive down prices. Before the Supreme Court ruling, Quinn and Hibernian insurance groups said that the cost of risk equalisation payments was already built into their premiums therefore in theory, their customers should be able to look forward to a reduction in premiums. This of course means a further nail in the coffin for VHI as more of it’s customers are likely to jump ship. This is more likely to be the reason why they’re threatening that VHI premiums could rise steeply.

    As I’ve already stated, the elderly and the sickest in our community will never be protected as long as we have a 2-tier health system in place. We need a one-tier system with mandatory health insurance for everyone to ensure equitable access to healthcare for all. Harney says that new legislation will be required to ensure that health insurance remains affordable. She’s got a hard uphill struggle on her hands.

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