Dáil Éireann debate -
Tuesday, 10 Jun 2003

Vol. 568 No. 1

Written Answers. - Medical Insurance.

Charlie O'Connor

Question:

547 Mr. O'Connor asked the Minister for Health and Children if there is any action open to him in respect of the problem that people over 65 years of age cannot take out medical insurance; and if he will make a statement on the matter. [15503/03]

Minister for Health and Children (Mr. Martin)

At present, an insurer is not obliged to give medical insurance cover to persons aged 65 years or over, other than where a renewal of existing or recently lapsed cover is involved. Under current community rating arrangements, an insurer must charge the same premium for the same level of cover to all subscribers who enrol before the age of 65 years.

Our voluntary private health insurance system is based on community rating. Under this system the young and healthy pay a higher premium than would be the case if rating was risk related, while the old and sick pay a lower premium than would apply under a risk rated system. In effect, the good risks subsidise the health care costs of the old and sick, but, under community rating they will be similarly supported when they become older. This principle is called inter-generational solidarity and is crucial to the integrity and sustainability of our system. Where people defer, or delay, taking out health insurance until they are at an advanced age, when they are more likely to make claims, the operation of solidarity is undermined. This is known as ‘adverse selection' and it represents a potentially serious threat to the sustainability of community rating as it currently operates.

The Health Insurance (Amendment) Act 2001 contains provision for the introduction of a system of lifetime community rating, which will involve allowing health insurers to apply late entry premium loadings to persons who take out insurance cover at or after the age of 35 years. Under this system, access to cover will be open to persons aged 65 and over. This system was recommended by an independent advisory group in order to strengthen community rating against the potential threat of instability which may arise from the practice of adverse selection. It is intended to pursue work on preparing regulations to implement a system of lifetime community rating, once the arrangements for introducing a risk equalisation scheme, which is necessary to support community rating, have been completed. A draft scheme is currently before the Houses of the Oireachtas for approval.