VHI – the Great RipOff Continues

Of all the companies, state, semistate, public and private sector, few have been so persistent and determined in gouging the customer as the semistate VHI. Not happy with fleecing its own custmers while extorting record profits and more or less controlling the private healthcare industry with a vice-like grip, VHI engaged on years of blatant obstructionism in permitting and fair playing field for competition in health insurance, and battled competitiors challenges in courts as far as Europe in order to maintain its massive market share, a perception that it alone treated older customers well, and that its persistent overcharging of lower income customers in order to massively subsidise Fat Cats on its luxury plans D and E is in some way in the public interest. (It took many years for BUPA to successfully challenge the fact that subsidises provided to the state company under “risk equalisation” would in fact end up going to VHI’s fund to shore up its loss-making luxury plans – it took many years for the private sector to establish that cross subsidisation should only happen on a like-for-like basis, so that the poor sod who could only afford Bupa/Quinn Essential plan isn’t going to end up subsidising some banker fat cat on VHA Plan E).

Its unsurprising in the current climate of the return of the 1980s “Golden Circle” arrogantly still pushed to greater heights than ever before by cronisym and pally cross subsidization of the banking and development industry, while protecting higher civil servants on as much as 8 times the minimum wage from pay cuts whilst cutting disability rates by 8 euros a week, that this kind of protectionism continues to exist.

So its of no surprise that VHI, despite massively haemorraging customers in the last year, instead of reducing subscriptions in order to win back old business and gain new business, is doing exactly the opposite in these deflationary times and raising rates by an average of 8%. It appears that they now wish to punish their loyal customer base for losing 120,000 customers last year, rather than make a bigger effort to maintain business and provide services to those who might have lost their jobs (which would assist greatly the lost customers, the majority of which are probably newly unemployed rather than switchers to the competition, who look increasingly attractive in context of continuous price gouging).

Its astonishing that the government has done little to try to stop this madness, given a commitment to reduce inflation and the cost of doing business in Ireland. A significant level of health insurers business is with corporate employee benefit programmes. These are massively transferring to the competition as VHI’s offerings are simply too expensive for corporate buyers. It would make huge business sense if VHI stopped using its muscle to manipulate pricing in the industry and instead tried to do a favour for all consumers.