asked the Minister for Health the estimated profit of the VHI Board for the most recent year for which figures are available and the estimated profit for the coming year.
Ceisteanna—Questions. Oral Answers. - VHI Board Profits.
6.
The Voluntary Health Insurance Board are a non-profit making body. The Voluntary Health Insurance Act, 1957, requires that the board should so arrange their transactions that, taking one year with another, the revenue of the board shall only be sufficient to meet their liabilities after proper allowance has been made for reserves, depreciation and other like purposes.
The Minister did not give me the estimated profit. Has he got the estimated profit of the board?
In the first line of my reply I said it is a non-profit making body. Therefore, there is not a profit figure.
What is the surplus?
There is not an estimated profit figure.
Is there a surplus?
Not above the reserves which are deemed by the board to be required to maintain their current levels of service. The surplus was £5.1 million in 1978-79; it was £5.4 million in 1979-80; and it was an estimated £3.8 million in 1980-81.
Could the Minister say whether this level of surplus is approved by him? Would he not consider that at least part of it might be employed effectively to reduce the premiums paid by the subscribers to this scheme?
It is only fair to say for the board that the surpluses have been employed by them to avoid increases in charges. There are certain levels of reserves, for instance, general reserves, which are used as a back-up fund to meet any deterioration in the board's position. This is maintained at a minimum level of three months' claims payments at current rates which, according to the board, represents the very minimum of inter national practice.
Are the Minister's Department consulted directly by the VHI Board as to the displacement of this accumulated surplus of approximately £13 million over three years?
If the board wish to obtain an increase they go to the National Prices Commission. From discussions with the board, the Department will be aware of the level of reserves and the policy being adopted by the board at any time.
The Minister has not answered my question. I asked him, and I will ask him again slowly, if the Department are consulted about the utilisation of a surplus of approximately £13 million, accumulated in three years.
I mentioned already that the Department were consulted by the board in relation to the level of reserves which the board think necessary to meet their minimum level of three months claims payments which internationally is regarded as the minimum level for the security of the board. Beyond that, there would be consultations and discussions about the kind of services the board might offer to their members and the ways in which the board might consider spending——
One final supplementary from Deputy Browne.
We have been given two different figures. Can the Minister say which figure is nearest to the three-and-a-half months reserves needed, and has he any special figure which he thinks should be added? Are the reserves more than needed, and would the money not be better spent either on keeping charges as they are or reducing them?
The minimum level of reserve which is regarded internationally as safe is a three months cover of claims and there is a figure of £7.4 million for 1980-81 for this purpose, The benefit reserve which is used to moderate increases in charges which have not changed since 1979 is £5.4 million. The reserves are used in the way the Deputy suggested.