Dáil Éireann debate -
Wednesday, 20 Nov 1996

Vol. 471 No. 7

Adjournment Debate. - Health Insurance.

Mrs. Geoghegan-Quinn

Ba mhaith liom buíochas a glacadh leat as ucht cead a thabhairt dom an cheist seo a ordú ar an Athló.

As Opposition spokesperson on Health, I have raised health insurance matters on as many as ten occasions in the past year in this House. Apart from hepatitis C, there is no other health issue that generates as much comment in this House.

During those debates I have been sharply critical of the VHI and have expressed alarm at the level of premium increases — 54 per cent over ten years and 35 per cent over the past four years, including a recent increase of 6 per cent — at a time when inflation was running at under 2 per cent per year. The increases have led me to coin the expression that instead of VHI standing for Voluntary Health Insurance, it stands for very high insurance.

I have also raised concern about the absence of a statutory council to represent consumers of health insurance and the VHI's row with private hospitals. Two other issues that I have raised are directly related to this debate.

In October 1995 the then chief executive of the VHI said in a speech that the organisation was considering charging higher premiums to people who joined at older ages. I made it clear that this discrimination would not be accepted by Fianna Fáil and that we would oppose any cherrypicking of younger customers. We are strongly committed to the concept of inter-generational solidarity. The VHI backed off any such plan claiming that the chief executive was thinking aloud and that such a thing could not happen because of the principle of community rating.

When Fianna Fáil raised this matter on Committee Stage of the VHI Bill on 14 December 1995 at the Select Committee on Social Affairs the Minister, Deputy Noonan, stated: "I assure older subscribers that they will be treated on an equitable basis with all other subscribers as heretofore". He also said that under the Health Insurance Act, 1994 it would be illegal for the VHI to depart from the principle of community rating which ensures that all subscribers are treated the same, regardless of age or medical condition.

Earlier this year I demanded a debate on the health insurance regulations made under the terms of the 1994 Act. I was concerned about certain matters in the regulations, including cover for psychiatric patients and outpatient cover. The Minister insisted that the status quo would apply with community rating. Following their introduction, it was announced that the British health insurer, BUPA, was entering the Irish market. I welcomed this announcement and said it was my hope that competition would be good for health insurance consumers.

Yesterday BUPA announced its various health insurance schemes and packages and said that the company's philosophy was about care, cure and choice. In its documentation it states that its essential scheme is community-rated. However, the company also has cash plans where costs vary according to the buyer's age. It is reported today that these plans bypass community rating and are not covered under the health insurance regulations. If so, this discrimination on age grounds is a serious threat to community rating.

I ask the Minister of State, on behalf of the Minister who acts as regulator of the health insurance industry, to clarify the position in relation to these plans. Do they infringe the community rating principle? Do they comply with the terms of the 1994 Act and, if not, what does the Minister intend to do? Does he plan to intervene and, if so, how, when and why?

Minister of State at the Department of Health (Mr. Currie)

The issue raised by the Deputy is an important, complex and sensitive one which needs to be approached in a considered way. As the Minister said in a previous Adjournment debate, our community-rated health insurance system has provided considerable benefit to our population. The principle of community rating and its preservation in our health insurance system is regarded as so vital that it has been enshrined in law. This step was taken to maintain the essential traditional values of our system in the new competitive market environment following on the EU third non-life insurance directive. The relevant legislation comprises the Health Insurance Act, 1994, which came into effect on 30 June 1994 and the health insurance regulations signed by the Minister on 28 March this year. The Act defined the broad principles which were elaborated on in the regulations.

The Act provided for the prohibition of non community-rated health insurance contracts with provisions covering open enrolment, lifetime cover, minimum benefits and the establishment and operation of a risk equalisation scheme between registered insurers. The latter mechanism was put in place specifically to support community rating, provide stability in the market and ensure no insurer would suffer from a worse than average risk profile because of preferred risk selection by other insurers. The British United Provident Association, is a registered health insurer under the Act. It is the only insurance undertaking from inside or outside the State which so far has entered our health insurance market as a competitor to the Voluntary Health Insurance Board. The Minister for Health is aware this development has been widely and genuinely welcomed. It adds a new dimension which has the potential to benefit our market.

Yesterday, BUPA — which had been working since April last to set up operations here through its branch BUPA (Ireland) — launched the schemes on which it has decided to conduct business here. Insurance cover for BUPA subscribers will commence on 1 January 1997. The Department now has the opportunity, as part of its normal regulatory function, to consider the contents of BUPA schemes. It commenced this process in conjunction with its consultant insurance advisers yesterday afternoon, immediately upon receiving the documentation published by BUPA. Should it be considered on completion of the process that there are matters which warrant clarification or discussion of the schemes, the Department will raise these with BUPA immediately.

The Minister for Health does not intend either making judgments or rushing to conclusions until the matter has been carefully gone into and fully assessed. He wants to re-iterate, however, that community rating is a core value of our system which Governments have taken specific legal steps to maintain. The Minister also wants it to be abundantly clear that our commitment is to a competitive market developed in accordance with our core values and not one that is operated by way of immediate intervention by Government unless this is found to be necessary to maintain the integrity of the regulatory framework.