Risk equalisation, according to the Health insurance Authority, is
a process that aims to equitably neutralise differences in insurers’ costs due to variations in the health status of their members. Risk equalisation results in cash transfers from insurers with lower risk members to insurers with higher risk members.
In other words, under risk equalisation, BUPA Ireland would pay a subsidy to the VHI to compensate it for having a greater number of high risk subscribers.
Irish Health Minister, Mary Harney, decided not to trigger the controversial risk equalisation payments in the health insurance market at this time.
According to the IrishHealth.com website:
If risk equalisation had been triggered, BUPA, which has a younger and less high-risk patient profile, would have had to pay the VHI up to 34 million euro in compensation.
BUPA Ireland’s Managing Director Martin O’Rourke, commenting on the decision recently said:
This is good news for consumers. We have always said that risk equalisation makes competition unviable
As I am a BUPA Ireland member - if this keeps my health insurance costs down, I am happy with this decision!
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It may keep your premium down while you are younger but when you are older and you need your health insurance the most you will be priced out of the Market. Risk equalisation underpins the concept of community rating which ensures that eveyone regardless of age or health pays the same premium. Bupa currently have a low risk mebership profile this will change in time. when it does and if risk equalistion is not in place your premiums will be much higher just at the time of life when you will least be able to afford to pay them. Bye bye private healthcare. Hello Public health system !