The VHI has reported a profit of just under €34m in its annual report published today. But it says another increase of 8.5% in premiums this year will be necessary to ensure financial viability.
The state health insurer says its surplus has more than doubled from the previous year, mainly because of greater efficiency and investment earnings. Operating costs have been reduced by almost 1.5%, saving €8.6m, while investments earned an extra €9m. VHI says it has also kept the cost of claims down by pricing hospital procedures and encouraging greater use of day care procedures.
Although the Government has agreed to impose risk equalisation - which means private insurers having to shoulder the cost of older patients - the VHI says it will be at least another year before there are any benefits to its members from this. It has been estimated that equalisation will mean extra income of at least €30m a year for VHI.
The VHI says profits have been reinvested in reserves, which have increased marginally to just under 34.5%, and that a profit of €28m is necessary just to remain solvent.
The organisation's chief executive Vincent Sheridan will be meeting Health Minister Micheal Martin today about the proposed increase in premiums but it is understood that it will be passed by the Government.
