The 9 per cent increase in medical insurance proposed by the VHI has been condemned by the SIPTU president, Mr Jimmy Somers, who said it was a form of additional tax, particularly for PAYE workers, and "outrageous in the context of Partnership 2000".
Mr Somers criticised the Government's role in the "latest attempt to hike VHI bills by more than three times the rate of inflation, adding more than £20 per person to most average subscribers' bills for a second year in a row".
While SIPTU accepted the need for greater efficiencies and tougher negotiations, particularly with consultants and service suppliers, an important factor in the VHI seeking such a high increase was the 12 per cent increase demanded by the Department of Health for private beds in public hospitals, Mr Somers said.
It was no longer tenable for the Minister for Health to "perform the incompatible and contradictory roles of regulator of private health insurance, owner of the VHI and price-fixer for private beds in public hospitals", according to the Fine Gael spokesman on health, Mr Alan Shatter. The conflicts of interest which resulted from this contributed to the increasing cost of health insurance and medical inflation, he claimed.
A Department of Health spokeswoman said there was "nothing to suggest the VHI board decision has been made on other than proper financial grounds". It was obliged by law to ensure its successful commercial operation, while medical inflation was just one of a number of factors contributing to the increase. This was against an international background of medical inflation increasing at a greater rate than standard inflation, she said.
Meanwhile, the dispute between the VHI and its only rival on the Irish market, BUPA, continued yesterday. VHI finance director Mr John Looney said BUPA was not comparing like with like when accusing the VHI of having significantly higher plan prices.
The VHI's Plan B should be compared with BUPA's Essential Plus scheme, he said. Plan B cost £259 for an adult and was very close in price to BUPA. Even allowing for the 9 per cent September increase, the VHI would contend it was a better package because of the much wider choice of doctors and hospitals it offers, Mr Looney added.
Medical inflation was running at about 7 per cent, while the VHI's annual claims costs compared favourably within the international context. With increases came benefits, he said, while the VHI - which has gained 1,100 subscribers a week on average over the past year - was committed to ensuring increases were within manageable levels.
A BUPA spokeswoman insisted the VHI Plan B Option, which includes extra cover, and BUPA Essential Plus were closest for comparative purposes. This meant that from September cover for two adults and two children would be £158 more expensive for VHI subscribers, representing a 22 per cent difference. In addition, BUPA would cover GP and consultant fees, and heart surgery to a greater extent, she said.
Approved VHI increases over the past 10 years total 56 per cent.
They breakdown as follows:
1988: WS no price increase
February 1989: WS 7 per cent
July 1990: WS 4 per cent
September 1991: WS 5 per cent
January 1993: WS 4 per cent
August 1993: WS 6 per cent
August 1994: WS 9 per cent
September 1995: WS 6 per cent
September 1996: WS 6 per cent
September 1997: WS 9 per cent
