Mary Harney (Dublin Mid West, Progressive Democrats)

That is not the case. The VHI has a derogation and is protected which is precisely what I seek to end. It will take some time to do so.

I remain a strong fan of risk equalisation, without which one cannot have community rating. It is not a question of whether we will introduce it but when we will do so. I have considered all relevant issues, the submissions made by those affected, the advice of Mercer and the advice of my officials in the Department who advised that there were strong reasons for and against introducing risk equalisation but that, on balance, it should not be introduced on this occasion. As I stated, once we trigger risk equalisation, it is difficult to turn back the clock. These are some of the reasons that, having received advice, I decided not to do so.

The worst that could happen in the health insurance market would be a return to a position of having no competitors. With regard to BUPA, even if the company were to leave the Irish market, I have no doubt it would sell its business to somebody else because 400,000 customers is a considerable business. I never bought into the view that if a particular company decided to exit the market, its customers would not be bought by somebody else given that the prospect of having 400,000 customers is an attractive proposition.

It is also true that BUPA makes substantially more money in the Irish market than in the United Kingdom because we do not yet have real competition. Health insurers generally make in the region of 7% profit, whereas I understand the figure for BUPA's operations here is in the region of 15% to 17%. Profit, therefore, was not among the issues I took into account. These were competition, a strong submission from Vivas Health and the advice I was given. As I stated, the question is not whether we will have risk equalisation but when we will have it. Risk equalisation is inevitable and must in any case be triggered if one reaches the market equalisation percentage, MEP, of 10%. I assure the House I have no plans to change the relevant legislation in this regard.

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