Dáil Éireann debate -
Thursday, 28 Feb 2002

Vol. 550 No. 1

Written Answers. - Health Insurance.

Róisín Shortall

Question:

118 Ms Shortall asked the Minister for Health and Children the reasons persons over 65 are precluded from upgrading their health insurance cover with a company (details supplied); the steps a person in this category should take to improve their health insurance cover; if he will amend this policy in order to avoid its ageist effect; and if he will make a statement on the matter. [7394/02]

Minister for Health and Children (Mr. Martin):

The operation of private health insurance in this country is regulated under the Health Insurance Act, 1994 and the Health Insurance (Amendment) Act, 2001. This legislation requires all health insurers to operate on a "community rated" basis, that is they must charge the same premium for a given level of cover regardless of a person's age, sex or health status. The legislation also provides for open enrolment, which obliges insurers to make cover available to persons under the age of 65 regardless of whether or not they were previously covered, and for lifetime cover, which means that once a person is covered by a registered insurer, he or she cannot be deprived of cover except in limited exceptional circumstances.

Having regard to the consumers, the existence of community rating represents a broad protection to the community as a whole in terms of individual insurance rate stability and equitable access to insurance cover. The viability of this system in a voluntary environment is dependent on people joining private health insurance at a young age. The surpluses that young healthy people contribute to the system facilitate the insurance of older, sicker people at premium rates that would not otherwise be affordable. The operation of community rating would not be adequately served by facilitating either the deferral of health insurance cover until aged 65 years or older, or facilitating increases in the level of cover, when the prospect of claiming benefits is greater. Such adverse selection is among identified practices against which community rating must be safeguarded.

Under regulations made pursuant to the 1994 Act, persons who are already insured can increase their level of cover, but are subject to waiting periods in respect of the additional benefits. The maximum waiting period for eligibility for payments under a health insurance contract in respect of an increased level of hospital in-patient services or ancillary health services shall be two years for a person under the age of 65 years when first named under the higher contract or five years for a person of or over the age of 65 years when first named under the higher contract. Current regulations also allow for persons of, or over, the age of 65 who have existing cover with a registered health insurer, or whose cover had lapsed for less then 13 weeks to transfer to another registered health insurer without penalty as regards waiting periods already served. It is a matter for registered insurers to decide whether or not to provide cover to a person over the age of 65 years whose circumstances regarding current or previous cover are outside those laid down in the legislation and regulations.

Pursuant to the 2001 Act, regulations are to be made which will remove the discretion of insurers to refuse cover to persons of, or over 65, who are not currently insured. This will occur in the context of moving to a system of "lifetime community rating" which involves additional premium to people who enter health insurance for the first time at older ages. This will therefore strengthen the system by providing that late joiners will be liable to pay sufficient extra premium to make up for the surplus they would have contributed had they joined at a younger age. Having regard to the reasons given in relation to the stability of the system of funding community rating, if a person over the age of 65 wishes to take out an insurance plan, in addition to an existing one, insurers are not obliged to make such supplementary cover available.