Dáil Éireann debate -
Thursday, 7 Dec 2000

Vol. 527 No. 5

Written Answers. - Private Health Insurance.

John V. Farrelly

Question:

16 Mr. Farrelly asked the Minister for Health and Children the date the Voluntary Health Insurance board applied to his Department for sanction to increase charges; if his attention has been drawn to the fact that the VHI is not prepared to accept the approval of new nursing homes here until after the year 2002; his views on whether this is a contradiction to the Government's policy on tax incentives as the developers of these new nursing homes are providing badly needed beds for our elderly; his further views on whether people who need convalescent care are being excluded from any of these new nursing homes; and if he will make a statement on the matter. [25491/00]

Eamon Gilmore

Question:

17 Mr. Gilmore asked the Minister for Health and Children if he has received a warning from the VHI that it may have to limit its services due to financial difficulties; the steps he will take to ensure the maintenance of full services; if he will increase VHI premia; and if he will make a statement on the matter. [28923/00]

Michael D'Arcy

Question:

66 Mr. D'Arcy asked the Minister for Health and Children if he has sanctioned an increase in Voluntary Health Insurance contributions; and if he will make a statement on the matter. [28946/00]

Minister for Health and Children (Mr. Martin)

I propose to take Questions Nos. 16, 17 and 66 together.

The VHI informed my Department on 31 October 2000 of its proposal to increase premiums by 5.5% with effect from 1 January 2001.

As part of this process, the VHI chairman has brought to my attention the broad range of considerations which inform decisions on the revision of premium charges, such as increasing consumption of healthcare by members, new technologies and pay awards. Other factors bearing on this matter include projected financial performance, commercial considerations relating to the board's business planning, and cost control. The chairman has also made me aware of the need for a premium increase in the context of the board being in a position to continue to offer full and comprehensive levels of service to members.

I have informed VHI that I wish to defer a final decision on the increase as proposed and I have suggested that discussions on the matter be entered into between VHI management and my Department. Early discussions are planned with a view to moving forward further consideration of the board's requirements for a premium increase.

The position in relation to nursing home development vis-à-vis private health insurance, is that long-term nursing care, which incorporates most of the business of nursing homes, does not come within the ambit of such insurance. Private health insurance does, however, provide cover in respect of the cost of convalescent care arising from hospital in-patient treatment.

Arising from the Deputy's question, inquiries have been made of VHI concerning its approach to nursing home coverage. The VHI has advised that it carried out a review of convalescent care in 1997. It was decided at the time that VHI would establish a new directory of convalescent homes and that all health board registered nursing homes should be invited to apply for inclusion in the directory. The VHI's criteria and procedures for selection were accordingly notified to all health board registered nursing homes in the country in November 1998. The criteria included evidence of current registration with a health board and having certain facilities at the home capable of being inspected at the date of the application. The selection process was open to all interested health board registered homes. It was decided that the directory would run for a three year period after which the process would start again and VHI would open up the process to all new and existing nursing homes.

The VHI confirmed that during the course of their early research they discovered that convalescent benefit accounted for only 3% of nursing homes income nationally and that 97% of nursing home income arose from long-term and respite care. The VHI advised that there are 118 nursing homes currently approved to provide convalescent care to VHI members. They are confident that these homes can provide the required services that their members are seeking and they will review their requirements for additional nursing homes prior to the expiratory date of the current directory.

Under the regulatory framework insurers are entitled to choose which providers shall provide services on behalf of their members. It would clearly be unsustainable and uneconomic to expect any insurer to cover all service providers. In this context, it is not considered that a conflict arises between the provision of tax relief incentives for new nursing homes and the coverage of such homes by insurers. It is recognised that insurers must be free to determine what facilities they are in a position to cover by reference to the needs of their members and the financial implications of same for their business.