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Thousands leaving VHI as cost of cover soars

MORE than 40,000 customers left private healthcare last year and a further 200,000 could quit this year because of rising costs and people losing their jobs.

In the aftermath of the latest 8 per cent increase in VHI premiums -- which follows last year's average of 23 per cent -- the Sunday Independent has learned that the real cost of VHI cover for families has almost tripled since 1997.

Figures given to Fine Gael health spokesman Dr James Reilly reveal that over the last 13 years, the semi-state has increased its premiums by 137.31 per cent.

In contrast, the Consumer Price Index, which covers household goods and services, has risen by just over 36 per cent during the same period.

The real cost for consumers has been even higher, with the VHI admitting that the cumulative impact of these increases has been to raise the real cost of health insurance under the VHI by more than 260 per cent in that period.

One of the critical factors in the rise of premiums was an increase of over 410 per cent in public hospital charges during the same timeframe.

"The scale of these increases show that the current regime of health insurance is no longer sustainable for young people and their families,'' said Dr O'Reilly, who revealed that over 40,000 customers left the private health insurance market in 2009.


He believes that, given current economic trends, it is now likely that up to 200,000 people may leave the private health system next year to go public.

Health Minister Mary Harney has revealed under questioning by Dr O'Reilly that while she had power to impose "a justified veto'', this had been repealed by the VHI Amendment Act of 2008 and she now had "no role'' in sanctioning or rejecting increases.

Ms Harney also blamed the increase in the cost of premiums on medical inflation, an ageing population and increases in the prices of public hospital beds.

"This is typical of the Minister's modus operandi, where the only thing she takes great care about is the desirability of distancing herself from any bad news,'' said Dr O'Reilly.

He was particularly critical of Ms Harney's "inability to drive down the costs associated with the provision of public care'' and noted we are now experiencing the astonishing scenario where "a private bed in a public hospital is more expensive than a private bed in a private hospital".


September 1997 9.0%

September 1998 9.0%

September 1999 9.4%

February 2001 6.5%

September 2001 9%

September 2002 18%

September 2003 8%

September 2004 3.8%

September 2005 12.61%

September 2006 12.5%

September 2007 8.5%

2009 23%

2010 8%

Total 137.31%

Sunday Independent