VHI and Risk Equalisation - lessons from eircom
It's getting a bit tedious listening to Oliver Tatton of Vivas claiming that VHI as the "incumbent" is a monopoly which is "creaming profits". The impression is created that Risk Equalisation is something anti-competitive. In fact, competition requires a level playing field, and in the community rating system insurance system, risk equalisation is essential to making the field level.The question remains, how does one bring about a market where there are multiple players giving consumers a good choice of products. The answer is in my view is not to penalise the members of VHI, or its owners (indirectly the taxpayer), making the shareholders of BUPA and VIVAS rich at our expense.
Trying to make the incumbent smaller, while trying to make it more efficient at the same time, often leads to a no win dynamic for its stakeholders. VHI should be split into two or more entities, and those entities should be sent out to compete on equal terms with the other players in the market. It would be a shame if political cowardice and foot dragging led to the decline of what has been a very good institution that has served the public interest well.
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