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 the Irish 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 a volte-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.