Paul Bradford (Fine Gael)

I welcome the Minister of State, Deputy Seán Power. I am interested in his views on competition in the health insurance market and, in particular, on the proposed introduction of risk equalisation. If the latter is implemented as proposed, it may well result in the health insurance market returning to a state of total monopoly by one provider.

The Irish health insurance market is unique among European and international models in its domination by one major player. VHI has a near monopoly on the market and had it entirely to itself for almost half a century. BUPA, a relatively new company, and VIVAS, an even newer one, have a limited share of the market between them but may now be obliged to operate according to the constraints of risk equalisation. A decision in the courts last week means that the Government is entitled from a legislative prospective to introduce risk equalisation. Interestingly, the judgment in this case included an observation that risk equalisation, if implemented as currently proposed, could make BUPA's position in the market commercially non-viable.

Given that the State encourages people to avail of private health care insurance, it has an obligation to ensure there is maximum competition in the market. Whether in respect of air or bus transport or any other form of economic activity, the one lesson we have learned beyond doubt in the last 20 years is that competition works and that a deficiency in this regard has negative consequences for consumers. It must be a keystone of health insurance policy to ensure that competition remains in the market. Not only must BUPA and VIVAS be facilitated to remain in the market but other players must be encouraged to offer health services to the public.

There is a convincing body of evidence to support my contention that the concept of risk equalisation, as threatened to be enacted by the Government, will result in the collapse not only of one particular company but of competition in general in the health insurance market. What will the Minister for State do to ensure competition is protected? What will be done to cushion the blow from the introduction of risk equalisation and the subsequent driving out of competition in the market?

I understand a meeting took place last night between the Minister for Health and Children, Deputy Harney, and representatives of BUPA, but I am not aware what transpired. Media reports at the weekend suggested the Minister is considering the introduction of several measures to deal with the greatly unbalanced situation of VHI's strength in the market. There were even suggestions that VHI might be broken down into several companies. These and other issues must be addressed in the interests of protecting competition.

There was an unwillingness on the part of some in the body politic to accept that risk equalisation might drive out BUPA and other health insurance providers. It has dawned on many in recent days, however, particularly in view of last week's court judgment, that risk equalisation, if introduced as proposed, will do just that. BUPA, a mutual society rather than a profit-making company, will be driven out of the market, and other companies will be discouraged from entering it.

Rather than facilitating a monopoly situation, we must ensure there is competition. Risk equalisation, however, is the greatest threat to competition. Its introduction in the context of the already distorted health insurance market in this State must be urgently reviewed and reversed. I look forward to the engagement of the Minister of State and the Minister, Deputy Harney, on this issue in the next crucial weeks. I await the Minister of State's response with interest.