Vol. 555 No. 2
96 Mr. M. Higgins asked the Minister for Health and Children the reason he sanctioned the increase in VHI rates, having regard to the hardship that this will cause for many subscribers; when he now plans to use the powers available to him to introduce risk equalisation among all health insurers; and if he will make a statement on the matter. [18047/02]
The position is that the setting of premium charges is the responsibility of the VHI Board. The legislation requires the board to set premiums at a level sufficient to cover costs and make allowance for reserves. The board is however, obliged to notify me in advance of putting proposed increases into effect. I may prevent the introduction of an increase, but must have good reasons for doing so.
Regarding the board's decision concerning the recent premium increase, the details provided by VHI in support of the need for such an increase were carefully examined. A key piece of information in the consideration process is the trend of likely claims which VHI will have to pay on behalf of members. The forecast figures given by VHI in that regard strongly supported the need for such an increase.
On the basis of the information put before me, I formed the view that the board's decision was in accordance with its legal duty in setting premium charges. In that connection, I considered that it would be unrealistic to veto the increase involved, while expecting VHI to meet the needs of its members, in terms of benefits and coverage, together with maintaining the integrity of its finances.
With regard to risk equalisation, the position is that draft regulations have been prepared in consultation with the Health Insurance Authority. Under the provisions of the Health Insurance (Amendment) Act, 2001, the Health Insurance Authority will have a central role in regard to determining and advising whether or not risk equalisation transfers are warranted between insurers having regard to the best overall interests of health insurance consumers.
As required by the 2001 Act, I will be presenting the regulations, in draft form for affirmation by both Houses of the Oireachtas. Subject to consultations with EU Commission services, with whom close liaison in the matter has been maintained by my Department, I propose to submit the draft regulations during the current session.
