Written Answers. - Voluntary Health Insurance.
John Bruton
Question:
313
Mr. J. Bruton
asked the
Minister for Health and Children
his policy regarding the provision of voluntary health insurance cover for those aged 65 years and over; if his Department has issued a ruling which prohibits people over 65 years of age joining or upgrading VHI cover; and if he will make a statement on the matter.
[7862/02]
The operation of private health insurance is regulated under the Health Insurance Act, 1994, regulations made pursuant to that Act by the then Minister for Health and Children in March 1996 and the Health Insurance (Amendment) Act, 2001. The position in relation to persons aged 65, and over, joining or taking out a higher level of cover with an insurer has not changed since the regulations made in 1996 took effect.
The 1994 Act and the regulations made in 1996 provide for the operation of health insurance on a ‘community rated' basis, that is, insurers must charge the same premium for a given level of cover regardless of a person's age, sex or health status. That 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 ‘lifetime cover'.
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 age 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 the existing legislation, insurers must provide cover to persons under the age of 65. It is a matter for each insurer to decide if they will cover persons of, or over, the age of 65 who are seeking cover for the first time. Insurers are not prohibited from covering such persons, but if they decide to provide cover, they must do so on the basis of community rating.
It is open to those persons of, or over, the age of 65 to increase their cover, say by opting for a higher level hospital plan, subject to waiting periods for payment of higher benefits. It is also open to persons of, or over, the age of 65 to transfer from one insurer to another without having to re-serve a waiting period already expired under the previous contract.
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, while enabling such persons to avail of cover.
