Dáil Éireann debate -
Thursday, 30 Sep 1999

Vol. 508 No. 2

Written Answers. - Voluntary Health Insurance.

Liz McManus

Question:

22 Ms McManus asked the Minister for Health and Children the legislative proposals, if any, he will bring forward arising from the White Paper on Private Health Insurance; the plans, if any, he has to privatise the VHI; and if he will make a statement on the matter. [18232/99]

Minister for Health and Children (Mr. Cowen)

The White Paper on Private Health Insurance which arises from commitments in An Action Programme for the Millennium represents the first ever Government statement of policy on the sector since voluntary health insurance was instituted over 40 years ago.

The White Paper seeks to provide a framework for health insurance which will consolidate and facilitate a competitive market based on the principles of community rating, open enrolment and lifetime cover. It recognises that the current market framework needs to be reformed and sets out changes regarding regulation, structures and relationships which are intended to reflect the best interests of consumers and patients, and to promote a market characterised by service, quality and efficiency.

An important dimension of the White Paper concerns the commitment of the Government to the development of the public health services. The approach taken by the Government in the White Paper in relation to public hospital investment, bed designation and progressing towards more economic costing of private beds in public hospitals reflect a strong commitment to safeguarding the interests of public patients in our mixed public-private healthcare system.

The White Paper proposes significant change in relation to market regulation and in the corporate status of the Voluntary Health Insurance board and involves legislation to give effect to these proposals. The Government have already approved the preparation of legislation to amend the Health Insurance Act, 1994, and arrangements have been made to commence drafting of a Bill in this respect. Regulations will be introduced to give effect to the proposals contained in the White Paper in relation to risk equalisation and age at entry community rating. Regulations will also be made to amend minimum benefit provisions to increase the lowest level of cover which an insurer may offer in respect of psychiatric illness by 20 days day-patient care and to simplify the existing regulations. Open enrolment regulations will be amended to provide entitlement to cover for persons of or over 65 years of age. In addition to this, my Department will prepare and submit for Government consideration, as soon as possible, heads of legislation in relation to a change in the corporate status of VHI.

The Deputy has asked about plans to privatise the VHI. Under the White Paper, the Government propose to provide that the status of the VHI be changed, in the first instance, to that of a public limited company owned by the State. The envisaged legislation will also include enabling provisions for third party investment in VHI and for its full sale, if deemed desirable. The Government have decided to provide an investment in VHI of the order of £50 million to enable it to be considered for authorisation as an insurance company.