Competition in the Irish Private Health Insurance Market

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Australia Ireland PHI group cover available Largely no Yes Number of PHI providers 37, (approximately one third are restricted membership undertakings) of which 5 are for profit companies and the others are mutuals 3, (excluding restricted membership undertakings) of which 1 is for profit, 1 is a provident association and one is state owned Business of PHI providers PHI business only allowed Not restricted to PHI business but in practice this is mostly what is written by the providers PHI share of health expenditure (2000- 2001) 7.1% 6.8% PHI National market share of largest provider 30% 80% PHI largest market share in any state 70% N/A PHI providers subject to solvency requirements Yes No (except VIVAS and BUPA on its world wide business) PHI premiums increase rapidly Yes Yes 143
Australia Ireland Risk equalisation Yes, including restricted membership undertakings Yes, excluding restricted membership undertakings (except for 1) Operated on a State by State basis Operated on a National basis Implicit risk selection or targeting through product design/pricing Yes – all members of a table in the same category must pay the same, although different premiums can be charged for the different member categories, which are single, couple, family and single parent family. There are many different tables of benefits. Yes Comparison of risk equalisation systems 1.11 Both Ireland and Australia operate schemes to support community rating. The schemes in some way and to some degree counteract the effects on insurers of the different risk profiles they have. In both Australia and Ireland, risk equalisation applies to the great majority of the health business written by the insurer. 1.12 In practice, no risk equalisation scheme will equalise risk profiles totally and any scheme will only partially achieve this objective. 1.13 In Australia the scheme is operated on a state basis so that equalisation takes place between all insurers operating in a particular state. The Irish scheme operates nationally. The Irish system effectively operates on a half yearly basis whereas the Australian one operates on a quarterly basis. 1.14 The Irish scheme is referred to as a risk equalisation scheme whereas the Australian system is referred to as a reinsurance scheme. Under both schemes insurers with a lower risk profile pay amounts over and above their normal claim payments into a fund which then pays the amounts out to insurers with a high risk profile to help offset their higher claims. The amounts paid into and out of the fund by each insurer are calculated according to a set formula. The formula ensures that all the money paid into the fund by those insurers contributing to it is paid out to those insurers who benefit from the fund. 144
Page 1 and 2:
A Report to the Minister for Health
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CONTENTS TABLE OF FIGURES _________
Page 5 and 6:
CONSUMER ATTITUDES TO SWITCHING ___
Page 7 and 8:
EXECUTIVE SUMMARY AND RECOMMENDATIO
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As a result it does not have to sat
Page 11 and 12:
Recommendation 7 The Minister for H
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indicates that consumers of PHI hav
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Recommendation 13 The Minister for
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is quite unclear, so far as the Aut
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1.4 For the next number of months t
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other insurers were to enter the ma
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2.6 Private health insurance (PHI)
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2.17 Open enrolment and lifetime co
Page 27 and 28:
• 2001: The Health Insurance Auth
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Figure 2: Annual Change in PHI memb
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of medical inflation and the higher
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VIVAS Health is rising steadily. In
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• Table 1 below shows the annual
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Figure 6: PHI Products BUPA Ireland
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• Work-based group schemes where
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from year to year and also during t
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3. DEFINING THE PRIVATE HEALTH INSU
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Figure 7: Key features of Related H
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price increase unprofitable by a hy
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4.6 Aspects of the exemption from i
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and quarterly management accounts t
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Table 4: Regulation of PHI Firms 48
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4.31 This is a positive step. Just
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obliges Vhi Healthcare to seek appr
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4.41 In the regulatory approval pro
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4.50 However, the Authority is clea
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Unfunded Lifetime Community Rating
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President of the Society of Actuari
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− The main other deterrent at pre
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o The former members of the Advisor
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materially affected by any seasonal
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It may also be noted that the propo
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4.94 There are 37 health insurers i
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Interviews with Possible New Entran
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have shown that new sales and switc
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not binding on incumbents and no in
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5.33 In this context Vhi Healthcare
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5.44 As the former incumbent monopo
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5.52 Vhi Healthcare’s first mover
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• Psychological costs 6.5 Transac
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18-24 9% 13% 25-34 34% 19% 35-44 31
Page 93 and 94: 6.24 The provision of renewal notic
Page 95 and 96: The HIA publishes on its website a
Page 97 and 98: Recommendation 10 Following consult
Page 99 and 100: Recommendation 11 The insurance com
Page 101 and 102: Regulations were established to aff
Page 103 and 104: transferred and the amounts require
Page 105 and 106: Buyer Power and Concentrated Market
Page 107 and 108: The Supply of Private Medical Facil
Page 109 and 110: VIVAS Health claims that Vhi Health
Page 111 and 112: approval on coverage of facilities
Page 113 and 114: Supplier-Induced Demand 7.36 The Vh
Page 115 and 116: Questions Relevant evidence Irish P
Page 117 and 118: to restrict individual choice of pr
Page 119 and 120: 8. CONCENTRATION AND MARKET POWER I
Page 121 and 122: gives us some indication of the com
Page 123 and 124: wishes to retain the flexibility to
Page 125 and 126: largest price increase that is prof
Page 127 and 128: scheme. Employees may be under the
Page 129 and 130: elevant regulatory requirements, ex
Page 131 and 132: Table 7 Vhi Healthcare Financial Re
Page 133 and 134: • There is limited buyer power fr
Page 135 and 136: Breaking up Vhi Healthcare would di
Page 137 and 138: expertise and other staff resources
Page 139 and 140: APPENDIX 1 Other forms of health re
Page 141 and 142: APPENDIX 2 Report of UK Government
Page 143: Australia Ireland Public hospital U
Page 147 and 148: 1.22 The Irish data is not split at
Page 149 and 150: Conclusion of normal claim payments
Page 151 and 152: APPENDIX 3 Consumer Attitudes to Sw
Page 153 and 154: Survey Respondent factors promoting
Page 155 and 156: APPENDIX 5 OECD Review of PHI The O
Page 157 and 158: not-for-profit insurers has posed c
Page 159 and 160: 114. Private insurers have not impl
Page 161 and 162: APPENDIX 6 List of Submissions The
Page 163 and 164: Understanding and Comparing Private
Page 165 and 166: Benefits Outpatient Cover Cover for
Page 167 and 168: Dobson, P., M. Waterson and A. Chu,
Page 169: Vhi Healthcare (2005), Annual Repor
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Competition in the Irish Private Health Insurance Market

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