Health Insurance (Miscellaneous Provisions) Bill 2011: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

While Fianna Fáil will not oppose this legislation, it provides us with an opportunity to debate broader issues such as health funding and how to provide an equitable and best possible health service. It is an accepted fact that Ireland has a two-tier health system. Those with private health insurance can access health care and treatments quicker, along with getting better hospital accommodation. One could argue this in itself is unjust, inequitable and militates against those who cannot afford private health insurance.

This inequitable system is due not to private health insurance, however, but to the failure to provide a proper public health system in the first place. It is fine if people want to continue taking out private health insurance. The State, however, should be providing proper health facilities.

A cross-subsidisation process occurs in the health system between private health insurance and the State. For example, if a person with VHI cover takes up a public health bed, the VHI is not charged for it. In turn, this forces someone without private health insurance out of the system or delays their hospital appointments or procedures. This is a key issue to be addressed in any debate on universal health insurance funded through the Central Fund and State subventions into the health service.

With no disrespect to the Minister of State present, Deputy Shortall, the Minister for Health, Deputy Reilly, should be present in the Chamber for this debate. Funding the health services in the years ahead is a fundamental issue. Today's front page of theIrish Independent carried an article highlighting the likelihood of extraordinary increases in VHI premia again next year. While the headline figure of the drop in private health insurance from 52% to 48% is not alarming, the 48% who remain in private health insurance are downgrading their cover. There is already financial pressure on those taking out private health insurance. Any further increases in the premia will a have huge impact on them being able to continue with their cover. Meanwhile, more people will be forced to fall back on an already pressured and overcrowded public health system.

We cannot wait for the Minister for Health's grand design for universal health insurance. Along with waiting for the establishment of an implementation group, waiting for its report and then acting upon it, it will be some ten years before some form of universal health insurance is in place. In the meantime, private health insurers consistently cherry-pick younger and lower risk customers, regardless of all the talk about community rating, intergenerational solidarity and cross-subsidisation.

Any analysis of the age profile and demographics of private health insurance customers shows the companies are pitching their products to younger people. Now, the VHI is unable to cross-subsidise because it cannot compete with other private health insurers such as Quinn and Aviva which target younger customers. Years from now when the age profile of Quinn and Aviva is older, some other private insurance health company will come in behind them while we wait for the Minister's grand plan for universal health insurance. Meanwhile, the VHI is haemorrhaging funds and needs to constantly raise its premia.

Last year, for the first time, the VHI made a conscious decision to raise the premiums of certain policies targeted at a specific age profile. That is against the ethos of the organisation but it was forced to make the decision because of the difficulties it has competing with other health insurers that do not incur the same costs. I am not a champion of the VHI but it was the only health insurer in the market for years. Young people joined, paid a premium and they subsidised older people who incurred most cost for the organisations. This worked reasonably well. There were inefficiencies in the processing and payment of claims and ensuring value for money on deals for its clients but there has been a marked improvement in this regard. The difficulty is if the Minister continues to allow the stripping away of its base of younger customers, we will have a major problem in a few years. Quinn Insurance is under huge pressure because it does not have the cash reserves it should while, following the European ruling, the VHI will be not exempt from financial regulation. The State will quickly face a huge liability and the Government seems to be doing nothing about it.

With regard to community rating, a sum of €205 on each policy is transferred under the principle of intergenerational solidarity. Everybody knows that is not enough but nobody is willing to talk about it. All we are doing is putting our heads collectively in the sand in the vain hope a miracle will happen down the road. The VHI cash reserves have been exhausted, it is no longer exempt from financial regulation and it will end up having to hike its premiums significantly in the months and years ahead, which will have further implications and repercussions for everybody in the public health system.

We have to be honest in how we deal with that. The Minister needs to outline immediately what the implementation group will do, the criteria and guidelines that will be laid down, what it will have to analyse and assess and whether it will report back in a short timeframe. As a Parliament, we cannot sit around and wait to discuss the group's final report. It should report on a quarterly basis on this fundamental issue of how we develop, support and fund our health services. This is important for all the reasons I have outlined.

On the broader issue of the health services, we should move beyond the election campaign at this stage because that was a different time. Deputies who were not Ministers then promised, for example, to abolish prescription charges, to keep Roscommon hospital open, to keep St. Mary's Orthopaedic Hospital in Cork open and to retain services in it and to build a new hospital in the north east. In February, the Minister promised a new hospital and that lacked credibility. He walked into the Department knowing full well major financial challenges facing the country and his Department and promised to get rid of prescription charges, about which he spoke passionately in the House on numerous occasions because he believed the 50 cent charge would discourage people from going to the doctor and accessing medicines.

We then found out recently that he attended Fine Gael and Labour Party parliamentary party meetings ahead of the budget for a briefing he hoped would make it into the public domain with backbenchers applying pressure in order that he could get his way to achieve a larger slice of the budget. That was his strategy but now we have been told he may propose a €2 prescription charge. We witnessed avolte-face in the House minutes ago when Labour Party Deputies one after another traipsed up the steps and turned left through the lobbies to vote in favour of the extension of a bank guarantee that they have campaigned excitedly against all over the country over the past number of years. They supported it today. The kernel of the issue is it is difficult to take seriously a proposal from the Minister on any health issue.

The programme for Government sets out clearly that year on year increased funding would be provided for community, long-term and residential care for elderly people. The Minister is in office ten months and he is running around the country closing these facilities. He is shepherding people towards private health care. He is using the HIQA, on the one hand, as cover to close nursing homes and, on the other, he is using budgetary constraints. Either way, it is a complete breach of the commitment in the programme for Government signed by both parties only ten months ago to provide increased funding year on year. This goes to the kernel of the matter of how we can believe in and trust the Government on the implementation of universal health insurance and other schemes that have been announced.

The Minister of State made a commitment a few weeks ago but I do not know whether it will happen.

A few days later, there were leaks from the same sources saying free GP care would not be available to all those on long-term illness benefit.

We are still unsure as to who is running the system. The Minister castigated the HSE on "Prime Time" recently because its financial controller said it would delay payment of expenses to staff. He rubbished the executive but, only a few months ago, he stood up with pride to say he had seized control of the HSE and sacked the board. The cameras were organised and he was outside the HSE's headquarters dragging staff out by the scruff of their neck. Now he is saying this terrible organisation made this decision. He is either in charge or he is not. If he is, it is time he stood up and acted like it.

My difficulty is every day confidence in his comments saps away. Most Members are fair, reasonable and rational but what was said prior to the election and what has been said since is at variance. However, every day since the formation of the Government confidence in what the Minister said has ebbed away and it has been undermined by his actions, deeds and words. Most of the red line issues of huge importance to him are ebbing away on a daily basis. We await universal health insurance, free GP care for everybody, investment in primary care units and community and long-term residential care. The Minister seems to be moving further away from providing those services.

Fianna Fáil will support the Bill. The principle of intergenerational solidarity and community rating is noble and should be supported but we must go further and realise that if we retain the current system, the private health insurance system will not be sustainable. It will collapse around us and the public health system will be snowed under. The State will not have the capacity to fund or support it. We cannot wait years. The Minister must act quickly and decisively to ensure sustainability in the private health insurance market.

The issue of preventive medicine has also not been tackled. The HSE has health promotion units and the Department of Health promotes campaigns sometimes to quit smoking, reduce alcohol intake and take up fitness regimes but they are piecemeal. It is my opinion that whatever steps we take in respect of this matter would not cost a great deal to implement.

Everyone knows that we are going to be obliged to take a very strong stance on this issue. We are sitting on a generational time bomb in the context of obesity in children. I am aware of the Minister of State's commitment to reducing the level of alcohol consumption. We owe it to younger people to address the issue of obesity. We must educate ourselves and our children on the need to be active, to be fit and to eat in a healthy manner. The statistics relating to what is happening to the younger generation are alarming. Obesity is becoming a huge issue and, if we do not act now, it will become a major killer in the years to come.

There is a need for a wholehearted and concerted effort on the part of a number of Departments and agencies on this matter. Responsibility in this area always seems to fall between the Departments of Health, Education and Skills, Transport, Tourism and Sport, etc., and the HSE and other agencies. What is required is a collective, singular focus on how we promote healthy living. Let us consider the position which obtains in other countries. In Australia, for example, there is a sense that the entire society has bought into the idea of a healthy lifestyle and there has been a dramatic reduction in the number of people there who smoke. It is surprising, particularly in light of all the information available, that 28% of the population here continues to smoke. I continue to struggle with the addiction of smoking and I find it incredible that so many younger people are taking up the habit. It is also incredible that these individuals engage in binge drinking on a regular basis. Coupled to this is the fact that so many young people have sedentary lifestyles, do not take exercise and eat the wrong foods. This is a matter we must act on.

I introduced a Private Members' Bill last week which proposes that products sold in fast food outlets should be labelled to indicate the number of calories they contain. I am of the view that it would be worthwhile to discuss the possibility of introducing sugar and fat taxes. Taxation is sometimes seen as merely being a mechanism to raise revenue. However, it can also send out a signal on behalf of society, the Government or the Parliament. For example, the price of cigarettes has been increased on a continual basis. This is obviously a revenue-generating measure but, equally, it also sends out a strong signal on the part of Government and society to the effect that cigarettes are not good for people. We raise the tax on cigarettes and other tobacco products in order to make them more expensive and less attractive and thereby discourage people from smoking.

I am not a killjoy but I am of the view that we have been slow to tackle the extremely important issue of childhood obesity. The latter can give rise to diabetes and to people losing their sight or being obliged to have limbs amputated. As Members are aware, there are many more things which could happen if we fail to address this issue. Obesity was a matter of concern in America in the 1960s but it is now an epidemic there. The patterns which occurred in the US at that time are now being repeated in Britain and Ireland. We know what will be the outcome of this problem.

In the broader context of discussing health insurance, one of the ways in which we can promote health and secure funding is to focus on prevention. The latter is the cheapest way to ensure that the health service delivers on the commitment to ensure that people remain healthy and stay alive for as long as possible. That is a key issue. I propose that the Departments of Education and Skills, Transport, Tourism and Sport and Health, etc., should jointly establish a health promotion unit that would have the requisite powers and resources at its disposal to allow it to target the key issues with which we must deal, namely, smoking, alcohol abuse and childhood obesity.

This Bill is necessary to provide, as the explanatory memorandum states, "a mechanism to support intergenerational solidarity" in the health insurance market. The memorandum also states that such solidarity is required because "there are incentives for insurers to design products that are attractive only to healthier lives, undermining intergenerational solidarity and the common good protections". Once again, the Oireachtas is being obliged to enact legislation in order to try to regulate the distortions and inequities brought about by the private health insurance market. Primarily, the latter is a market rather than a means of funding health care. In order to maximise profits, the private health insurance market often discriminates in favour of the healthy and against the aged and the ill. The State is then obliged to intervene — it has done so repeatedly — in order to try to redress the imbalance.

A question arises with regard to why the Government insists that the way forward for health reform in this State is by means of an insurance-based system. We are all of one mind with regard to the need for reform. It is the proposition of an insurance-based system to which the Fine Gael appears to be absolutely wed which gives rise to real concerns on my part. My remarks in this regard provide only a small insight of the range of concerns I harbour about the model that has been proposed.

It is interesting to revisit the programme for Government and the commitments it contains in respect of health reform based on insurance. The programme states:

A system of Universal Health Insurance (UHI) will be introduced by 2016, with the legislative and organisational groundwork for the system complete [that is, finished] within this Government's term of office.

That is a major commitment by any standard. The first step in implementing it is supposed to be a White Paper on financing universal health insurance. The programme for Government indicates that this White Paper will be published early in the Government's first term. Some time ago, the Minister for Health, Deputy Reilly, explained to me what constitutes such a term. When referring to two terms, he stated that the period involved was ten years. Therefore, the extent of one term of office is five years. So the White Paper is to be published early in this Administration's first term in office and, as the programme for Government states, it will "review cost-effective pricing and funding mechanisms for care and care to be covered under UHI".

On 14 September last, I tabled a parliamentary question in which I asked the Minister to indicate the timeframe for the publication of the White Paper. In reply, he made what I believe to be a considerable departure from the commitment provided in the programme for Government. The Minister stated:

The Government is embarking on a major reform programme for the health system ... While universal health insurance is the ultimate destination of this Government's reform programme, there are a number of important stepping stones along the way and each of these will play a critical role in improving our health service in advance of the introduction of universal health insurance.

In the reply, the Minister also mentioned the special delivery unit, strengthening primary care and repeated that oft trundled-out phrase to the effect that "money follows the patient". Furthermore, he indicated that the Government had given approval for the establishment of an implementation group on universal health insurance and stated that this will have responsibility for assisting the Department in preparing the White Paper. The Minister made a further significant observation when he said that the White Paper will be published within the Government's current term in office.

Given that I look at the responses I receive and I listen to what the Ministers state in reply to me here as a spokesperson on both health and children, I believe there is a big difference between that statement "within the Government's current term in office", within a five-year period, and the programme for Government commitment to publish "early in the Government's first term". Early, in my view, would be in the first couple of years. Now it seems, at least to me, that the timeframe is being extended all the time. We are always tempted to use the oft-used analogy of kicking the can down the road and I am tempted to apply it once again in this case.

That aside, and explaining my concerns, the Minister went further in that response and added an "However", stating:

[T]he precise cost of universal health insurance will significantly depend on the success of various reform measures ... over the next 3-4 years. This will influence the development of the White Paper and, as such, it is not possible to be more specific regarding its publication at this stage.

Something that is to expose itself in the next three to four years will influence the preparation and presentation subsequently of the White Paper that was definitely promised in the early stages. Whether it even presents within the so-called "five-year term" of the 31st Dáil is now a moot question.

Here we see a fundamental element, which is exactly as it must be seen, of the Fine Gael and Labour Government's health reform agenda being kicked years down the road. The White Paper would appear to be turning into a white elephant. The Minister, in his response, stated that he saw the delivery of all of this within a ten-year period but there is no guarantee that the Government will be back after this Dáil, whatever its duration. Every day we are here it becomes more interesting.

In the meantime, we have the continuation of the inequitable and inefficient two-tier health care system which the Minister, Deputy Reilly, and the Ministers of State, Deputies Kathleen Lynch and Shortall, and all of their colleagues so strongly and correctly criticised when in opposition. I hope they have not changed their minds on that because the current system is abhorrent. It ill-serves us as a people and I do not believe that anyone could describe it in any international forum in a short couple of sentences. The type of system we have in this State would take some explaining in any language.

Worse is the continuing imposition of the health cuts imposed by the former Government partners, Fianna Fáil and the Green Party. In my home county of Monaghan, I campaigned vehemently with colleagues across the political spectrum in this House in opposition to the removal of key services from our local hospital, Monaghan General Hospital. Never could I have envisaged the further loss of services from that hospital site following on the general election in February last. All of the acute services had been removed and none of us, including former Deputies of the main party in government with whom I developed a close and respectful working relationship that continues to this day, could ever have imagined that this new Government of Fine Gael and Labour would impose further cuts after all that happened over the preceding years to which those parties were witness and to which they were such strong voices in opposition, and yet that is what has happened.

Our minor injuries unit has been reduced from a seven-day to a five-day, Monday to Friday service, and from 9 a.m. to 9.30 p.m., as it was, to 9 a.m. to 5 p.m. It is a major loss of critical access for those in my home county and the Minister's response to me time and again is that they can now go to North East Doctor on Call at Castleblaney or to the emergency department at Cavan General Hospital, both of which are at their wits' end in trying to cope with the current footfall and throughput. It is making situations even worse. All of this is excused on the basis of savings. The previous Government at least tried to paper it over with the argument of patient safety, but this is nakedly about money. It is not about patient service in any shape or form.

The Bill has been introduced in that context and in the context of a declining health insurance market. VHI has stated that it expects up to 200,000 people to give up private health insurance by the end of 2012 as a result of rising unemployment. The proportion of the population with health insurance declined from 49% in 2007 to 47% in 2010, and the numbers qualifying and receiving medical cards have increased. Some 30% of the population have a medical card, while 23% have neither medical card nor health insurance, including myself, on principle, and must pay as they go through every stage of the health care system. Thus, 53% of the population depend entirely on the public health system, from which the other 47% also benefit significantly, for example, from the use of private beds in public hospitals, but data from the OECD show that the largest proportion of funding for health care in the State comes from the public finances, at 80.7%.

When we debated the predecessor to this Bill, the Health Insurance (Miscellaneous Provisions) Bill 2008, I stated that we were seeing a turning of the tide. I stated that the astronomical rise in unemployment was resulting in more people applying for medical cards, the cancellation of private health insurance and ever greater demands on the public health services. These services, because of the fundamentally flawed policies and the disastrous mismanagement of the health services by previous Governments all of which were led by Fianna Fáil, were almost at breaking point. I stated that the cuts imposed since autumn 2007 and greatly increased cuts in 2008 were creating a crisis situation, and that is what we have lived with since. Regrettably, my words have proven correct. Two years on, we see the ramshackle structure of the health services under even greater pressure than at any time previously.

This Bill simply addresses one aspect of that structure, the need for what is called societal and intergenerational solidarity in the health insurance sector. It does this by continuing up to the end of 2012 the arrangement whereby the burden of the costs of health services is shared by insured persons through a cost subsidy, an age-related tax credit funded by the collection of a levy on all insured lives.

There is a need to protect the health system from a predatory approach by health insurers which would see older persons and persons with illnesses being forced to pay higher health insurance premiums, and this Bill seeks to achieve that for another year. How long will we have to depend on such stop-gap measures?

The Minister's back-tracking on the programme for Government commitments on universal health insurance does not augur well. I will argue for a very different approach, namely, universal health care delivery, delivered to all on the basis of need, and need alone, and paid for through direct and progressive taxation.

If the Minister's promise is fulfilled within the term of the Government, then clearly the whole legislative and funding framework around health insurance will have to be changed. As I pointed out earlier, the can is being kicked a long way down the road — conveniently, I add. All of this points to the need for a new direction, and the direction that I believe is best suited to our needs is the one I and my colleagues in Sinn Féin, and other voices, have long advocated. Real inter-generational solidarity and social solidarity are needed across our health care system, not just within a private health insurance market. For this, we require a single-tier public health care system, funded by fair and progressive taxation, with access to every citizen based on need, and need alone, and without any relation to the balance in one's bank account, the money in one's pocket or one's geographical location.

Why complicate matters by creating a separate health insurance system that requires a huge battery of legislative and regulatory checks to make it work? The only logic for the course being proposed by this Government, represented and spoken for by the Fine Gael Minister, Deputy James Reilly, is to benefit the private health insurance industry — I say this to the Minister of State, Deputy Shortall, as a well respected Labour Party representative of long standing.

Here we are, on the cusp of yet another budget, budget 2012, which will be announced next week. As we face into this new budget and all that will entail, there is no sign of any kind of fundamental change in the thinking of the Government or that any new direction will be presented for our health system by the Government for the future. Fine Gael and Labour, which made so much of the health care system in the lead-up to general elections over recent years, very particularly under Deputy James Reilly in his Opposition position, facing off with the former Minister for Health and Children, Ms Mary Harney, have given rise to a sense of expectation among the wider electorate. None of it even presents on the horizon at this point in time. We are faced with the continuation of the dreadful system we have but with no prospect of real address, let alone reform.

My appeal, as it is on so many issues in regard to the Government, and to those in the Labour Party in the first instance, with whom, on the basis of their proclaimed position on many issues, I would find comfort and common appreciation, is to use their very important and valuable access to the decision making process in the Government and in the Cabinet to ensure that new directions are found, that new models are mooted and that we have the implementation of a system of which we can all be proud. That is within their gift. It is within the timeframe of a five-year cycle — a term of Government. In looking back, would that not be a proud legacy for their involvement in this 31st Dáil?

I wish to share time with Deputies Maureen O'Sullivan, Seamus Healy, Catherine Murphy, Mick Wallace, Thomas Pringle and Luke ‘Ming' Flanagan.

We have a two-tier system. It is an obscenity that access to decent health care is dependent on how much money a person has. We are in a situation where, as a result of the EU-IMF arrangement, albeit under the cover of health and safety considerations, health services are being slashed across the country. Local hospitals and accident and emergency units are being downgraded and there is a trolley catastrophe daily in many of our hospitals. Those are the problems we have to resolve if we are to have a health system of which we will be proud, which is fair and where there is equal opportunity for access to decent health care, which is one of the most important priorities for anybody and for any decent society.

This legislation proposes to extend the risk equalisation scheme. We have a two-tier, privatised health system that many people, because of the chronic underfunding and the crisis that exists in our public system, are forced, because they do not have a choice, into taking out private health insurance. Given this and in so far as this is a measure to try, at some level, to regulate the private health insurance system and create some sort of level playing field, we have no choice but to go along with it. However, the problem is that it still follows the failed strategy of having competing private health insurers as the way in which to deliver health services. In other words, it accepts and is underpinned by the notion of a two-tier system where affordability will dictate the quality of a person's health care.

Those who advocate this kind of approach to delivering health care would say that its principle objective is to improve access to health services. In that regard, it is failing completely. Competition has not led to lower premiums and Irish health insurance companies are raising their premiums, most recently with Quinn Insurance hiking up its premiums by 12%. Health policy expert Professor Charles Normand of Trinity College Dublin warned in the aftermath of this hike that those plans that have competing private insurers may not be a very good mechanism for keeping prices down. If we look at the case of the United States, we find dramatic evidence of how correct that is.

The health system in the United States is based on competing private insurers, and it is the most bureaucratic and the most expensive health system in the world, with US costs twice those of comparable countries. Some 31% of health spending goes on bureaucracy, executive salaries and massive profits. Over $600 million of the $2 trillion spent on health in the United States, which is 15% of GDP, goes on these salaries, bureaucracy and profits. In the Irish case, the Government is proposing to continue down this road of competing private health insurers, although it is costly and does not deliver access to the health service. The Government must abandon the universal health insurance model, which is only about profit in private health insurance companies, and instead provide a national health service that is accessible to all and is based on progressive taxation.

It is rather strange to discuss private health insurance. Whether the legislation is necessary is one thing but a great deal more is needed in our health service. Many people have believed in and purchased private health insurance. I did too, many years ago. One sometimes asks oneself why one did so. It has nothing to do with our health system or the quality of our health service but with accessing that system and having faith in being able to access it. That is the reason so many people have opted for private insurance. The aim is to access treatment speedily.

According to the Minister's speech last night, almost half the population, 47.5%, have private health insurance in one form or another through inpatient plans. Of course, the VHI has the bulk of this business. The numbers are decreasing but it is still a significant amount. In 2010, €1.9 billion was spent on premia, a 19% increase on the 2008 figure. There is still plenty of money about.

On the one hand, private health insurance takes pressure off the public system, but it is based on unfairness and the fact that payment will secure quicker access. Payment will get the scan and quicker access to the consultant and secure the private or semi-private room. I cannot but be aware of the system in the private hospitals. When one gets a time for an appointment, it takes place at that time and when one gets a date for a procedure, nine out of ten times it will happen on that date. Patients generally do not have to go through our chaotic accident and emergency system unless there is an emergency. Now, money can pay for the various clinics catering for minor ailments, broken limbs and so forth, and the waiting time is minimal.

I do not understand why our public system cannot provide the same efficient service. We have excellent doctors, nurses and other personnel. There have been some very good developments with the breast screening and cancer services, but there are major problems. In 2004 the then Minister for Health and Children stated, "The one thing I want for the country I love is to have a health service that is accessible to every citizen, regardless of his or her wealth". That Government had seven further years in office and I do not believe progress was made in that regard.

We have a two tier health service, with access based on ability to pay rather than need. We need a fair and equitable health system. The programme for Government states that this Government is the first in the history of the State that is committed to developing a universal single tier health service, which guarantees access to medical care based on need, not income. Within the programme there are ambitious plans to radically change the Irish health system and to provide for equal access, universal health insurance, which will be compulsory whether it is with private or public insurance.

That is the plan but in the meantime the reality is very different. There is immense pressure on the public health system. We are aware of the waiting lists and yesterday the Minister of State and I attended the briefing on the mental health service, so we know what is happening in that area. People are dying unnecessarily. I pay my private health insurance and because I am healthy, thankfully, and have not needed to use it more than once or twice, my good health is benefitting those in the private system. However, it is not benefitting people generally. The system must be more equitable.

The Bill seeks to regulate the health insurance market and the area of risk equalisation. The Supreme Court judgment found that risk equalisation was not maintaining what was termed "the common good". I believe the common good, in broad terms, means having a health system whose core principle is the common good of all, not just the good of those who have the ability to pay for it. We need a fair and equitable health system, with equal access available to everybody and not based on ability to pay. The Bill refers to all consumers, without differentiation being made in respect of age and health status. There should be no differentiation within the health system. We must look to the common good for all of our society.

This debate is about private insurance and competition within that market. Competition is really about maximising profits, which is what is happening. In the past few days huge increases have been proposed in the cost of health insurance. Quinn Healthcare has proposed an increase of 12% and one can take it that the other companies will shortly follow suit. If the Government raises the charges for private and semi-private accommodation in public hospitals in the budget, that will further increase the cost of health insurance. There will be a number of significant increases, as there have been in the past few years.

This insurance favours young and healthy people rather than elderly and ill people. It all relates back to the type of health system in this country, which is a two tier system that favours very wealthy people in society who can buy health insurance and get preferential access to health services. What we need is a public health system, paid for through progressive taxation, that is free at the point of use, with access based on medical need. That should be the priority of this Government and Dáil.

That priority has been put at risk by the policies of previous Governments and the current Government. One example is the huge reductions in budgets for the general hospital service and for acute hospitals. In south Tipperary there was a €13 million reduction in the budget in the past three years; in Blanchardstown the reduction was approximately €20 million in the past two years. Most hospitals in the country are in a similar position. That means beds are closed, beds are put in corridors, there are trolleys in accident and emergency departments, access to services is hugely reduced and there is huge pressure on staff. Unless these budget reductions and the moratorium on recruitment of replacement staff are reversed, the current crisis in health services will intensify and ordinary people will find it almost impossible to get services.

I believe the services should be locally based and accessible. Independent international professional research shows that locally based services in smaller units give better quality care, better value for money and better access to services. Unfortunately, that is not happening with the Minister's reform programme, which is transferring services to larger hospitals, as if big is best. However, big is not best for quality, value for money or access. We should focus on providing public health services paid for by progressive taxation, with access based on medical need.

I welcome to the Visitors Gallery the pupils of Cashel community school who sang on Leinster Lawn for the switching on of the Christmas tree lights. They sang exceptionally well.

I join the Ceann Comhairle in welcoming them.

If one is looking to pick holes in this Bill, one might ask whether there should be inter-generational solidarity. Of course there should. However, that is if one accepts that private health insurance is an appropriate way to fund the health care system and that people can buy their way into our hospitals, or at least skip other people who might well be more ill.

The Labour Party campaigned — it is in the programme for Government — for a universal health insurance levy but it is not clear what role health insurance will play when that levy is introduced. That must be articulated. For example, it is not clear to me what the relationship will be to pay-related social insurance, which had a health component to it but which was amalgamated in recent years. I would welcome a response from the Minister of State on those issues.

People are choosing to have health insurance, where it eats heavily into the budgets of many households that can just about manage to pay it, because they are terrified that if they get sick they will not have the ability to get into hospital for the appropriate care. As has been said previously, when people get into hospital the level of care is good but the problem is accessing those services.

The difficulty in recent years, and certainly in the past 12 months and since this Government has taken office, is that there has been a plethora of closures, including ward closures with a consequent knock-on effect. It is the same position with the publicly funded nursing homes. There is a consequence to taking this approach. Just as our health service developed in a fragmented manner it is being reformed in a fragmented way. It is not at all coherent to the citizens of this country and it is scaring people into taking up private health insurance because they are frightened about what happened to somebody like the late Susie Long, who delayed getting a colonoscopy long enough to end up with a form of cancer that was not treatable.

We have not had a national health strategy in this country and this Government has not articulated one. I stated on several occasions that we must have it mapped out to us what is intended. If we are entering the second Republic that is being talked about we should look to the future in terms of our expectations of the services that are to be provided. There is a responsibility on this Government to do that in a coherent way for people. That would help people in making a decision on whether they need health insurance. They are being frightened into believing they need it. They are afraid that if they or a family member becomes ill, the ability to get into a hospital and be treated is very much reduced without it.

The next speaker on my list is Deputy Mick Wallace, who is not present.

Deputy Daly, are you speaking in this slot?

You must be in instead of Deputy Mick Wallace because you are not on the list but you can substitute. I call Deputy Thomas Pringle.

This Bill serves to highlight the inequity in our health system in that we must bring in legislation to provide for increases in tax credits to facilitate private companies in making profits on people's fear that they will not get access to the health services they need. That whole market has been driven by fear in that if people want to be sure they can leap-frog the queues when they need to enter our hospital system they can get the access they are often denied under the existing health system.

This morning I was contacted by a constituent who has a 95% blockage in his carotid artery and is in imminent risk of a massive stroke. He does not have health insurance. He has been told there is a two year waiting list for his operation. Even with the recognition that his case is an emergency he has been put on a list for admission to Galway University Hospital. He has been waiting two weeks to get a bed in that hospital. The accident and emergency department is overrun with trolleys and it cannot accept any patients.

If that man had private health insurance he would have been admitted last week, had his operation, would be recovering now and waiting to go home to rejoin his family. Instead, he is sitting at home paralysed with fear, wondering if he will have a stroke before he is called for admission to Galway University Hospital. That is the health system we have created, and that is the system that has resulted in ordinary people who cannot afford private health insurance sitting in fear. Other people are at the pin of their collar trying to ensure they have insurance so that in the event of such a situation arising for them or a member of their family they can get access to our health system. That is a shame on us all, and it is a shame on any Government that perpetuates such a system.

We heard from the Minister's contribution last night that €1.9 billion is being paid in health insurance premiums. If that money was taken in direct taxation and put into our hospital system we would have no need for private health insurance. We would not need the profiteers selling people plans and pumping money onto families, and families paying over €3,000 a year in health insurance premiums. We could have a system that would guarantee access to all and ensure that people like my constituent would not be fearful that if something were to happen they would not get the health treatment, and the system, they need. This Bill serves to highlight that inequity which, unfortunately, this Government wants to perpetuate and put on a statutory basis where everybody will be paying exorbitant amounts of money under so-called universal health insurance.

We should use the €1.9 billion in premiums and the existing health budget to ensure we have a system that is free at point of access for everybody, guarantees universal cover for everybody and ensures that people do not have to live in fear. It should ensure that if their health lets them down this State will care for them and not leave them languishing on waiting lists or trolleys in hospitals, reminding them that if only they could afford health insurance they could leap-frog the system and use the benefit money brings them to get treatment.

If there was no other option but to go down the route the Minister is taking, namely, the idea of inter-generational solidarity, it would be a good thing and one could not argue against that but the reality is that it is only solidarity among those who can afford this private health care. I do not have any health care package, and obviously I do not have a medical card, and the reason for that is I do not believe I am better than anyone else. I believe I am equal to everyone else in this country. I have two young children whom I love more than any children in this country but at the same time I do not believe they are better than any other children in this country.

Earlier this summer I had an experience of using a service where one could pay to skip the queue when I visited family and friends in London with my family and we went to LEGOLAND. In LEGOLAND, which is not a life and death situation, there is a state of play where the rich children get to skip the queue ahead of the poor children. I was in a lucky position where I could have paid for my children to skip the queue but I decided I would not because I did not believe it was fair. For approximately £80 a day my children could have gone on all of the fairground rides before all of the other children. I left that place very angry that people could be treated like that.

I am in the lucky position that neither of my children, touch wood, is sick and I hope they will not be too sick in the future. We heard interesting figures from Deputy Ó Caoláin earlier that 80.7% of the health service is paid from the public purse yet 53% of the population are treated as second class citizens in that they will have other people jumping the queue ahead of them because apparently they are more important than other people.

I always understood that the Labour Party was a socialist party and the idea of socialism was that everyone is treated equally. It begs the question: what is equal about a situation where a poor child could potentially be left to die while a rich child gets to skip the queue? I cannot see how any socialist could stick by this form of socialism. It does not make sense, so I am left a little bit baffled on where socialism has gone, if it is about killing the poor and letting the rich live longer.

The Deputy should read the programme for Government.

The programme for Government is not socialist.

We are using up time now.

Never let facts get in the way of a good line.

I also used to be in the VHI, but a couple of years ago I decided that the system left a lot to be desired, so I opted out of it. About two months ago I had to get an operation on my arm and I went to Beaumont Hospital under the public system. The only problem was getting in there, but once I got in, the people were so nice. The surgeon was wonderful and the nurses were fantastic. It seems to be accepted that we have a fantastic system, if we could only get into it. The notion that we can get better care under the private system than the public system needs to be questioned.

Approximately 47% of the public pay for private health insurance at the moment, but the State is paying 90% of their care. The main reason for people to opt for private health care is a fear that they will not get into the public system in time. Private health insurance allows them to be bumped up the waiting list. Most people who take out private health insurance are not looking for extra privileges, but they are afraid that they might have to wait too long, given the need for some serious medical treatment.

I recently read a very good article by Fintan O'Toole, and I would like to finish by quoting some of it:

There are, for example, four different categories of patients: medical card holders, who are entitled (in theory at least) to fully free services from GPs and in public hospitals; "dual cover" patients who have both a medical card and private health insurance; "non-covered" patients who have neither a medical card nor private health insurance; and patients with private health insurance only. How could such a system not require a vast bureaucracy to run it and how could it not lead to inefficiencies?

As with so much else, however, this vicious and absurd system was tolerated so long as the middle classes could afford to manoeuvre their way around it. But the illusion that middle class people could actually benefit from systematic inequality was just another Celtic Tiger con job. What was actually happening was that middle class people were being conned into paying twice — through taxes and private insurance — for an inadequate, inefficient and unfair system.

A system that depends on people paying again for services they have already paid for through taxation is inherently unsustainable. It is now unravelling. No amount of insurance can buy you out of an overcrowded A&E. And the cost of fattening up the VHI for privatisation is simply too high for most people to pay.

The truth is coming home: the rotten injustice of our health system is bad even for those who thought they could avoid it. A fair, one-tier system of social health insurance is not just less shameful and better for the poor. It is also more rational, more efficient and better for everyone.

This Bill draws attention to the debacle that is the Irish health service and the role of private health insurance. I find it absolutely shocking that 47% of the population have private health insurance. That is a huge number of families who are already overburdened with other bills and who have to scrape together the means to come up with those funds. It is interesting to note that this figure has declined. Some 29,000 people no longer pay for private health insurance as a result of the recession, job losses and the increased premia that these companies are charging.

We have to examine why these families are paying thousands of euro for private health insurance. It is not unheard of for a family of four to pay about €5,000 for such insurance. It is obviously not because they hate their neighbours and they feel ashamed to share a room with somebody if they end up in hospital. The reason is that they do not have confidence they will get the treatment for themselves and their families out of the public health service. This is particularly graphic in the case of cancer care. Anybody who has been in the system knows that the centres of excellence and the public health system in dealing with cancer is better than anything that the private insurance companies could deliver, or at least equal to it. Why would anybody pay thousands to go into the private system? The only explanation is that they cannot get into the system. That has to be addressed.

Like Deputy Catherine Murphy, I would also like to mention my former colleague Susie Long, who died needlessly in 2007 because she had to wait eight months for a colonoscopy. It was an absolutely tragic situation, and we were told it would never again happen and her memory would be marked in some way. The promise at the time was there would be no distinction between public and private patients on waiting lists and people's bank balances would have nothing to do with who would be seen first. That was a lie. The number waiting for colonoscopies has increased. It has doubled since 2010 to 2,400 people. How many of those people will end up unnecessarily dead like Susie Long, because they did not have the money? The Blackrock Clinic only this month revealed towww.irishhealth.com that it has no waiting list at all for colonoscopies. People who are covered by private health insurance can get a colonoscopy at any time, but if they are not, they must come up with €1,000. Who in this day and age has €1,000? Very few people have it.

It is patently obvious that people only choose private health care because they do not have confidence that they can rely on the public system. This is madness. The whole debate exposes the madness of having for profit companies involved in the whole system of health care. We see it graphically in respect of nursing homes, where the Government is standing over the closure of public nursing homes, while at the same time driving people into private nursing home provision. It is an absolutely ridiculous situation.

The irony is that the private health insurance companies — Aviva, VHI and Quinn — all massively hiked their premiums this year. In fact, VHI did so twice. These companies are highly profitable, largely due to the Irish market in the case of Aviva. If people are willing to pay thousands of euro to these private companies for a minor advantage, then this demonstrates the point that they would be prepared to pay more in PRSI contributions if they had the confidence that they would get a decent public system. Instead, as a result of Government policies, we have moneys diverted so that the public system is run down and the private sector is boosted. That is disgraceful and is shameful of the Labour Party to participate in that.

I welcome the opportunity to speak about the Health Insurance (Miscellaneous Provisions) Bill 2011. The four principles of private health insurance in Ireland are community rating, open enrolment, lifetime cover and minimum benefit. The Health Insurance Act 2009 introduced, on an interim basis, a system to deliver on the policy position supporting community rating, which is achieved by risk equalisation. A more robust, transparent and effective scheme for risk equalisation to support the core policy of community rating is to be introduced from 2013. Therefore, the current Bill will extend the interim scheme for a further year, while the details of the 2013 scheme are advanced.

At this juncture it is worth examining the idea of risk equalisation, as it is a term that is often bandied around, and in some cases by people who do not have a clear understanding of it. Risk equalisation is a process that aims to neutralise, in an equitable manner, differences in insurers' costs that arise due to variations in the health status of their members. Risk equalisation involves transfer payments between health insurers to spread some of the claims cost of high risk members among all the private health insurers in the market, in proportion to their market share. Risk equalisation is a common mechanism in countries with community rated health insurance systems.

It is worth examining the background to the current legislation. The Health Insurance Acts 1994 to 2009 provide the statutory basis for the regulation of the health insurance market in the interests of the common good. At the centre of the common good is intergenerational solidarity between all insured persons and community rated health insurance. Following the July 2008 Supreme Court judgment people continued to have access to community-rated health insurance plans and to benefit from other common good protections such as open enrolment and lifetime cover.

However, the reality is that in the absence of a mechanism to support inter-generational solidarity there are incentives for insurers to design products that are attractive only to healthier lives, undermining inter-generational solidarity and the common good protections. This would not be universally beneficial to all members of the State and certain sections of society could easily be discriminated against or simply left uninsured. In these circumstances the market can be subject to fragmentation and inter-generational solidarity weakened. In the absence of an appropriate response, it would be in the interests of all insurers to focus on products that would be particularly attractive to healthier lives and to minimise features in their products that would be attractive to older people and those who suffer ill-health. This conflicts with the common good principles underlying regulation of the market and should not be acceptable to any understanding Government.

The Health Insurance (Miscellaneous Provisions) Act 2009 was enacted for these reasons. Its main objectives were to affirm that the purposes of the Health Insurance Acts were to ensure that access to health insurance cover is available to all consumers without differentiation in respect of age and health status, to strengthen the provisions to achieve this purpose, to enhance inter-generational solidarity and community-rated health insurance and to provide for the implementation of related measures to achieve these objects. This has proved to be solid legislation with one noteworthy element. The key measure was the introduction, in respect of persons aged 50 years and over and for the period 1 January 2009 to 31 December 2011, of a new age-related tax credit in respect of payments due in that period of private health insurance premiums.

This measure was to be funded by the collection of an annual levy on health insurance companies based on the number of lives covered by policies underwritten by them. These measures provide that health insurers receive higher premiums in respect of insuring older people and that older people receive tax credits equal to the amount of the additional premium such that all people continue to pay the same amount for a given health insurance product. In this way community rating is maintained while insurers receive higher premiums in respect of older people to compensate partly for the higher level of claims.

This method of sharing costs is known as the interim scheme of age-related tax credits and community rating levy and is a scheme of considerable benefit. The main object of this Bill is to continue to ensure that in the interests of inter-generational solidarity the burden of the costs of health services are shared by insured persons by providing that the cost subsidy between the young and the old, as provided for by the Health Insurance (Miscellaneous Provisions) Act 2009, is continued for a further year. There is considerable merit in this and I have no hesitation in recommending the Bill to the House.

I support this Bill in its entirety. The private health insurance market can never be unregulated. It is a market place. Historically, there has been only one provider in this country but, thankfully, we have competition now. This is about private health care. I hear the people opposite referring to the health system and the health service but the programme for Government has a reforming theme running through the health area.

It involves closing hospitals.

Deputy Murphy should cast her eye to the Gallery where there are young men and women from our schools who will make up the insurance market of the future and who will look to us and to the Government to bring about a reformed health service, including universal health coverage, which will be fair and equitable. This is why the Bill is important. It is important that the Minister of State, Deputy Shortall, given primary care tasks, the Minister, Deputy Reilly, and the Minister of State, Deputy Kathleen Lynch, are supported in this regard.

I challenge those opposite to come over and engage meaningfully in the process rather than giving a constant barrage of negativity. Last night, the Minister of State stated that the main object of the Bill is to ensure the burden of the costs of health services are shared by insured persons. Maintaining our health service and delivering vital reform is difficult. It is not easy but the process must be carried out. We must ensure that we maintain a functioning health insurance market which delivers not only for the insurance companies — I do not support them — but for customers, the marketplace and patients. As other speakers have stated, it should be based on the principles of community rating, open enrolment and lifetime cover. These are important elements of the reform.

The Bill provides safeguards and the fundamental principles necessary but we must engage actively with the insurers. If one speaks to the insurers, one hears their speech and tone but we must engage with them to ensure the health providers, insurers and patients are at the forefront of everything we do. More important, we must meet the needs of customers and patients and facilitate the delivery of a quality health service at competitive prices. The continuing price increases we have seen from some insurance companies have forced people to consider their insurance needs, as Deputy Claire Daly suggested. In some cases such people have opted out, in other cases they have changed plans and in other cases again people have stayed where they were.

I am a customer of the VHI and I am probably a patient at this stage as well. We need a competitive marketplace. If we do not have it, the current model will compound the difficulties with providing resources for the public health system. At that stage those opposite would come here with a different tale of woe and give us a different story. Let us have a real debate and reflect on the additional demand on our public hospitals if we did not have private health insurance. The funding of beds in public hospitals plays an important role in the funding of our health system. The Deputies opposite cannot have it both ways or any way they wish. Let us have universal health care and a fair and equitable health system.

The country is similar to an oil tanker in the ocean: one cannot turn it with one tug of the wheel; it takes time. Deputy Wallace is involved in business and he is well aware of the transformation and reform necessary in the country and he is aware that it cannot take place over night. It will take time. Let us have some realisation of the situation from those on the opposite side regarding the issues of the health system. The Minister for Health and the Minister of State in the House are at the forefront of brining about reform. Let us make this happen. I call on those opposite to join us rather than sniping from the far side of the House. They should join us.

I do not suggest the Minister will not produce the goods. Time will tell.

Deputy Wallace should give us a chance.

I would not underestimate the Minister for one minute.

We have been in government for nine months; the baby has just been born. Those opposite should give us a chance to take Piaget and the other models of psychology to fruition with the child. This Government is in its infancy. Reform is taking place in the health area.

Deputy Flanagan reminds me of the guy who is never happy because he is against everything and for nothing, except for his fine speech on mental health last week which was a credit to him. That is the only positive thing I have heard from him since he came to the House. I call on the Deputies opposite to work with us rather than be negative. The young people in the Gallery represent the health-insured people of the future.

Deputy Luke ‘Ming' Flanagan is a remarkably positive man.

Let us give them a health system whereby they can state in 20 years time that they remember the Minister, Deputy Reilly and the Minister of State, Deputy Shortall, and that they were the people who pioneered a reformed heath service.

That is inspirational stuff. Deputy Buttimer inspires me.

I am pleased to hear it. It was nothing else.

I welcome the opportunity to speak on this Health Insurance (Miscellaneous Provisions) Bill. It is the main objective of the Bill and it is in the interests of society in general that the burden of costs of health insurance is shared between all people of the State, young and old. There is no doubt that as with all forms of insurance there is an obvious economic and business motivation for companies to try to attract as many young, healthy people as possible and to seek to minimise the number of elderly people or people who may prove to be more expensive customers for other reasons. The objective of the Bill is to try to redress this imbalance.

There is no doubt that the provision of health insurance in the country must continue to be heavily regulated because of the natural competitive tendency that exists in all businesses. There are few businesses more important than those that deal with the provision of health cover.

I accept many of the points made. Without doubt we have a flawed health system which is in need of major surgery. The private health insurance industry is one which, on the face of it, performs better but has many areas which need to be improved. We have to acknowledge that we need to work very hard to protect people who do not avail of private health insurance, despite the fact that almost half the people in the State have health insurance. That is why I welcome the provisions being put in place to strengthen protection. Irrespective of risk, age or gender, after reasonable waiting times one can change insurance companies and be guaranteed to be delivered insurance.

I want to touch on another area, the cost of health insurance. I refer to the supply side. The levels paid to our consultants and the cost of purchasing schemes from health insurers remains far too high. One of the main reasons for this is that we still have a significant deficit in the supply of hospital and medical services. There is a protectionist regime in the medical and hospital supply areas.

In Cork a fully fitted hospital which cost tens of millions of euro is in a position to open under the management of the Mater Private clinic but the VHI has refused to cover it. I understand the reason is primarily that it does not want to increase the supply within the south Munster area. One has to consider why. It may be because if more people were treated, the amount of money it would have to expend would increase in the short term. I call on the Minister of State, as I have privately in the past called on the Minister, Deputy Reilly, to examine the situation.

When there are good, solid entrants who wish to engage at no cost to the State in the supply of perfectly good private medical services one health insurer should not be in a position to effectively block entry to the market. It is a worrying development. The cost of purchasing private health insurance requires us to examine the dynamic between demand and supply. Even within the private health insurance market there is a limited supply which allows prices to be held at their current high rates.

The Bill is a step in the right direction and does not obviate in any way, shape or form the ambition of the Government to achieve universal health cover but I concur that strong elements of the private health insurance industry remain broken and more remains to be done.

There are a lot of things which divide us in this House in terms of the policy and funding of social services. One of the things on which we all agree, which is reflected across the political divide, is that the market alone cannot deal with the distribution of health care. It simply cannot be done. The pure form market is good at some things but is peculiarly bad at the distribution of social services, including health services.

As far back as 1993 or 1994, all parties in this House recognised that because it was then that the evolving system of so-called risk equalisation was introduced. There was a recognition across the political spectrum and in the community that we could not have a situation where people who are a greater risk, because of age or inherent illness, would have to pay more. We should spread the risk across society, the community and generations. That is why we have the useful and laudable notion of intergenerational solidarity.

It is important to reflect on the view that the market is not the place where the problem can be solved but it has a role. Our discussion on universal health insurance is a recognition of that. Intergenerational mobility concerns people who suffer illness or are older and should not be penalised for that. I would add another category, namely the ability to pay. It is the great additional category which needs to be added to the equation and what brings us to universal health insurance.

President Obama had big battles in the US in the past two years. He was insistent that people who could not afford to pay for their health care should be brought into the system and that there should be a reliable and robust system of funding for health care which did not discriminate against people on the basis of ability to pay. The battle focused on the basic health services required. Luxury care can be paid for if people have money to do so.

People should not be discriminated against in terms of the basics in any civilised health service on the grounds of ability to pay, any more than they should be discriminated against because of age or an inherent illness. That is the one great additional step we need to take to get us to universal health insurance. I have huge confidence in the Minister of State, the Minister, Deputy Reilly and the Government, arising from the commitments in the programme for Government, that we will make the giant leap to reach the stage where we have a fundamentally fairer system of health care in Ireland. It will not be easy to achieve and will not happen quickly but a lot of the important work has already started.

As others have said, the Bill is an opportunity to have a wider debate. We are dealing with a relatively net issue. It is essentially a continuation of an interim measure which was introduced by the last Government when the Supreme Court shut down the system of risk equalisation which had been put in place. I remember having this debate with the former Minister for Health and Children in the Seanad. I was surprised the then Government did not move more quickly to introduce a proper system. I understand tax relief is available but it is a sticking plaster approach. I mean no disrespect to the previous or current Government.

The Supreme Court did not completely shoot down the idea of community rating. Its judgment had narrow grounds for rejecting the idea. The Chief Justice said at the time and it was made clear in the judgment that it was possible to have a system of risk equalisation which did not offend the basic principles set out in the Act. I am surprised the problem was not addressed then.

A question has been troubling me. The Minister said this Bill will be passed this year and a more permanent system will be put in place next year. How does that fit in with our commitment to universal health insurance? Why would we go down the road of doing all the work on risk equalisation and tidying the system to make it more robust when we are, in any event, looking at the bigger picture of universal health insurance? I am not clear how the two things fit together.

Now we are heading toward universal health insurance could we not live with a sticking plaster, given that we have had it for two or three years? We could live with the sticking plaster for another couple of years in circumstances where we are introducing universal health insurance.

The are many reasons I am happy to see Fianna Fáil in opposition. For the first time people like Deputy Kelleher will become involved in this important debate, as he did this afternoon.

He pointed to the reality of our two-tier health system. I do not recall Fianna Fáil Members acknowledging that in the past. The party effectively abandoned all health policy issues to the former Minister for Health and Children, Mary Harney, for six or seven years. It offered no initiative in terms of health provision in general, how resources should be distributed, the role of the market and the benefits of universal health insurance. I am not sure whether anything in this area was included in the party's election manifesto. The Fianna Fáil Party removed itself entirely from the pitch in regard to health.

As such, I welcome that party's return to the pitch. As Deputy Buttimer said, this issue is too important to be solely a prerogative of the Government in terms of its planning. Everybody should participate. I very much agree with previous speakers that the market will not provide the solution. The market is peculiarly unsuited to the issue of distribution of social services, particularly in regard to health. We look forward to the Minister's proposals for a universal system of health insurance. The Minister of State, Deputy Shortall, is working tirelessly in regard to the primary care element of it. I hope we can accelerate our move towards the new system rather than, as Deputy Ó Caoláin suspects may be the case, allowing any delay in doing so. It is a hugely important objective for this Government and I very much welcome the Minister's commitment to it.

I entirely agree with the sentiments expressed by my colleague, Deputy White. When discussing health insurance and health services in general, we should bear in mind that every single person in this country will have to access the health sector in some form or other during the course of his or her lifetime, either on the way in or the way out. It is an issue that affects everybody to a greater or lesser extent. All of the young people in the Gallery today either have been or will be beneficiaries of the health service, and that must be paid for.

In recent years we have seen a shift away from the expectation that people can rely on the public health service to provide for their needs, with an alternative to be provided by the private sector. Unfortunately, the two have crossed over each other and there is a severe degree of duplication. I spoke on this issue back in the mid-1990s when the whole debate emerged about competition in the private health insurance sector and the sharing of the burden by new entrants. We discussed at length the need for new entrants to recognise that everybody must carry a fair share of the burden, both new providers and those already operating in the market. Unfortunately, that did not happen despite the existence of the sticking plaster legislation which we are proposing to extend.

I compliment the Minister of State, Deputy Kathleen Lynch, on her opening contribution to this debate last night. It offered an excellent outline of the current system, the difficulties facing it and the need to address those issues as a matter of urgency. Countless people throughout this country have made health insurance contributions over their lifetime, some of whom have been unfortunate enough to have to draw on the services provided. Many VHI customers are now old, but they were not always so. They made their contributions throughout the period in their life when it was expected that they would have little call on the system. They made their payments consistently and it was a great burden to do so at times of very high taxation.

There are issues of serious concern in regard to the current dual system of provision. For example, there was and is the suggestion that, in some cases, private health care is soaking up a disproportionate amount of available resources. If that is allowed to continue, not only will we have a duplicate system, but also a hugely expensive one across the board. If services can be provided, as has been alleged, at a much more competitive rate in other European countries, then something is wrong. Why are we unique? We are not so special that we should be treated differently from everybody else. It is well known that there are health systems in other European countries and beyond which work effectively and competitively and are very responsive to the needs of their population. I do not see any reason that we, at this stage of our development, cannot provide a service equal to any of them.

We have a year or two to contemplate what should be done. There is one certainty in this; if we do not eliminate duplication, overlap and double payment by the consumer into the system, we are doomed. The universal health insurance system, as proposed by Government, is the right approach. Everybody is entitled to a basic level of cover and a basic level of service thereafter. If that provision is not in place, only the people who can afford it will be sure of obtaining service. That is not acceptable in a republic. We are still in control of our own destiny to some extent. The part which nobody can explain is that we were able to provide all of these services many years ago. Despite the public and private contributions made over many years and the fact that we allegedly have a sophisticated health system, we cannot provide the same level of response we were able to provide 25 or 30 years ago. Some of us might know the reason for that, and it is being worked on by the Government.

I fully agree with Deputy White that it is deeply sad that Fianna Fáil, a party which represented a broad spectrum of society for many years, failed to exert its representational authority by asserting to its erstwhile colleagues in government that there was an obligation to provide for all of the people in so far as possible from the resources available to us. That was never done and I cannot understand why. Fianna Fáil Members, of all people, should have understood the importance of doing so. I welcome Fianna Fáil's return to this debate. It is hugely important for the benefit of this country and its people. I support the proposal outlined in the Bill.

I thank all of the Members who engaged in the debate. The provisions of this Bill are exclusively technical in nature, providing for a one-year extension of the interim scheme of age-related tax credits and the community rating levy for 2012. It includes several small modifications to the scheme to allow for a more precise level of support for community rating. That is the purpose of the Bill and it does not pretend to do anything more than that. It simply deals with a situation that must be dealt with for the coming year. The broader issues in regard to risk equalisation will be dealt with over the course of the coming year by the Minister for Health. The concept of risk equalisation will be more vital than ever in the context of a universal insurance health system, and the programme for Government includes a commitment in this regard.

Section 2 of the Bill amends section 6 of the Health Insurance Acts 1994 to 2009 by providing a revised definition for "age group" and a new definition of "type of cover". These definitions will facilitate the provision of information broken down by each year of age and also by specific health insurance contracts.

Section 3 amends section 7 of the Act to provide for more detailed information returns to be submitted by health insurers to the Health Insurance Authority. The information returns will be broken down further by each year of age, as required, and also by type of health insurance cover. That will provide very important data to which we do not currently have access. In addition, regulations made under section 7 may require separate returns in situations where the benefits payable under a type of cover have materially changed.

Section 4 amends section 7 of the Act to provide broader scope to the Health Insurance Authority in terms of using additional relevant information alongside the formal information returns submitted by the health insurers. This will assist the authority and the Minister in performing their respective functions under the Act.

Section 5 amends section 470B of the Taxes Consolidation Act 1997 to make the necessary changes required to extend to 2012 the age-related tax credit in respect of private health insurance premia paid by persons aged 50 years and over.

Section 6 amends section 125A of the Stamp Duties Consolidation Act 1999 to provide for the continuation in 2012 of the collection of an annual levy on health insurance companies based on the number of lives covered by policies underwritten by them.

I am in complete agreement with the many comments of Members in respect of the unfair nature of our health service. It is because both parties to this Government are so concerned about the unfair nature of the health service and the great difficulty which so many people encounter in accessing the service and the unacceptable delays involved in accessing vital services that this Government is committed to introducing fundamental reform to the health service. Both parties in Government had substantial policy documents on the health service prior to the election and in the context of the negotiations for the programme for Government, the health area was the area of most concern to both parties. A substantial element in the programme for Government deals with the kind of health reform programme to which the Government is committed. I wish to make it clear there is no argument in this regard. The current situation where many aspects of our health service are dysfunctional and where it operates in an entirely unfair manner, is completely unacceptable to this Government. This is the reason we are so determined to introduce the kind of fundamental reform that is required in order to introduce a fair system.

The aim of the reform is to deliver a single tier health service which will ensure equal access to care, based on a person's need and not on their income. The programme for Government provides for this in a universal health insurance context. We are realistic in stating that these reforms cannot be introduced overnight. They are major reforms. What is involved in turning around the big ship of the health service requires very detailed preparation and very intensive work over a period of time. It is for this reason we are setting as an objective the introduction of universal health insurance at an early stage in a second term of government. If we suggested it could be done this year or next year, it is quite clear we would not be able to deliver such a commitment because it is not possible to do so in such a short timescale. For this reason we are being ambitious but also realistic in setting a medium-term timescale in order to introduce full universal health insurance. This is the responsible attitude for the Government to take and it is realistic.

However, there are a number of important stepping stones along the way and each of these will play a critical role in improving our health service in advance of the introduction of universal health insurance. First, significant reform of the acute hospital system is planned. The special delivery unit was established in June 2011 to unblock access to acute services by improving the flow of patients through the system. It undertook its work to put in place a systematic approach as a priority to eliminate excessive waiting times in emergency departments. This is probably the one major complaint we hear from our constituents and it was identified as an absolute priority. The special delivery unit is establishing an infrastructure based on information collection and analysis, hospital by hospital, so we can know the situation in real time. It is quite incredible that this information is not available to us but new systems have had to be implemented in order to collect these important data. This will allow us to begin to embed performance management into the system in order to sustain shorter waiting times. If we have learned anything over the past decade, we should have learned that throwing money at problems in the health service will not solve those problems. We need to introduce fundamental reform to which the Government is committed but we need to have accurate data systems in place in order to be fully informed. It cannot be a question of money going into a black hole without knowing what that expenditure is achieving.

The establishment of the special delivery unit necessitates alterations in the current role of the National Treatment Purchase Fund, whose resources have been refocused to align closely with the work of the special delivery unit and to allow for a progressive improvement in the performance of the country's hospitals. The National Treatment Purchase Fund is proactively working with the special delivery unit and the HSE to achieve the best possible results for patients. The National Treatment Purchase Fund is working to support hospitals in the delivery of a 12-month maximum waiting time for inpatient or day case surgery by 31 December 2011. The Minister for Health, Deputy Reilly, has stated on a number of occasions that he is committed to meeting that objective. We expect to be able to move forward to reduce further that waiting time, year by year.

A further critical aspect of reform of the acute hospital system is the implementation of a new, more efficient funding system for hospital care which will be a mechanism whereby money follows the patient. It will include a purchaser and provider split, whereby hospitals will be established as independent, not-for-profit trusts. Various initiatives to facilitate achievement of the money follows the patient funding system are already under way. These include a patient-level costing project to track resources actually used by individual patients in hospitals and a pilot project on prospective funding of certain elective orthopaedic procedures at selected sites.

We have to know that an amount of money being spent on particular procedures is providing value for money. For instance, if a block of funding is given to a hospital we will know how many hip operations this money will buy. It is not just a question of allocating a lump sum of money to a hospital and hoping it will carry out as many procedures as possible. The funding must be much more targeted in its allocation while ensuring that best value is achieved.

The reform agenda also involves enhancing and greatly expanding capacity in the primary care sector in order to deliver universal GP care with the removal of cost as a barrier to access for patients. This Government is absolutely committed to delivering on that element of the reform agenda in the short to medium term. The full universal health insurance is a medium-term project which is well under way but the reforms promised on opening universal access to GP care are reforms we intend to deliver within this term of Government. This commitment will be achieved on a phased basis to allow for the recruitment of additional doctors, nurses and other primary care professionals. Taking this step will allow us to move away from the old hospital-centred model where health care was episodic, reactive and fragmented. We aim to deliver a more proactive, joined-up approach to the management of our nation's health.

A total of 80% of health activity relates to chronic disease. It is the intention of this Government to move the vast bulk of chronic disease management away from hospitals to the local primary and community care setting. This is how real reform can be introduced to the health service. Unfortunately, as it works currently, fees act as a significant barrier for people in accessing care when a condition develops. In many cases, people cannot afford the fee of €45 to €55 for a GP visit. This problem is increasingly common and people are putting off having conditions seen to in the hope that the symptoms will go away. In many cases where people decide to neglect early symptoms, they inevitably end up with poorer outcomes and a more serious condition requiring more expensive care, frequently in an accident and emergency unit or through admission to hospital. The purpose of the reform provided for in the programme for Government is to have early intervention to encourage people to access care at an early stage and achieve better outcomes, earlier diagnosis and a much more user friendly health service. This also entails having a much more cost effective health service. This is what we intend to achieve in the term of this Government.

To respond to some of the points speakers made, given the complex nature of what is planned, the Government has approved the establishment of and terms of reference for an implementation group on universal health service. The details of the group are being finalised and it will commence work shortly. Its work will pave the way for the introduction of universal health insurance in the medium term.

I thank Deputies who contributed to the debate. This important legislation deals with a specific issue and should be considered in the context of the overall reform agenda to which the Government is fully committed. I am aware that Deputies opposite are also committed to introducing these types of reforms. As I stated, they should not expect us to have completed the task in the first nine months of the Government. Considerable work is under way and I hope Deputies will start to see the benefits of this work from next year onwards as we start to roll out the commitments contained in the programme for Government. I hope at that stage the Opposition will give us some credit for the work we are doing.

We will give the Minister of State the benefit of the doubt.

Question put and agreed to.