Health Insurance (Amendment) Bill 2016: Second Stage

I move: "That the Bill be now read a Second Time."

I am pleased to have this opportunity to address the House on the Second Stage of the Health Insurance (Amendment) Bill 2016, which was published last week. Over 2 million people in Ireland have private health insurance. Health insurance in Ireland is community rated. This means when someone purchases health insurance, their age, gender and health status do not affect the amount they pay. Older and sicker people pay the same amount as younger and healthier people. Our community-rated health insurance market means the cost of health insurance is shared across all members of the market. Older and sicker people pay much less for health insurance than they would in a risk-rated market. People who are less likely to need health care pay more than they would in a risk-rated market. Our market is based on generational solidarity. Younger and healthier people effectively subsidise older people who may be less well and need more care. This is intergenerational solidarity.

Community rating means health insurers must offer health insurance policies at the same price to everyone, regardless of a person's current or potential health status. There is a limited number of exemptions to this which include lower prices for children and young adults and higher prices for people purchasing health insurance for the first time after the age of 34. Community rating is a very different concept from the usual way of setting insurance premiums in other markets. In risk-rated markets, the premium charged is based on the insurer's estimate of each person's risk, taking into account relevant factors such as their age and existing medical conditions. Healthier people pay lower premiums and sicker people pay higher premiums. The premium for someone who has held health insurance for many years will rise if his or her health deteriorates under a risk-rated system. We can all see the disadvantages and concerns a risk-rated system poses to people who have health insurance.

In 2015, private health insurers in Ireland paid out €2.1 billion in claims. Average claims costs vary significantly for different age groups. In a risk-rated market, people would be charged very different prices for health insurance depending on their age and risk of ill health. In a community-rated market like ours, the risks are shared across the market as a whole. This means health insurance is more affordable for sicker and older people than it would be in a risk-rated market. While community rating does not tell insurers what price they can charge, it ensures that they charge everyone the same price.

We have community rating because we want to ensure the cost of private health insurance is shared between everyone who decides to buy it. Community rating provides all insured people with peace of mind and certainty that if they get sick, their health insurance premium will not increase as a result. The Health Insurance Act requires all insurers to apply community rating. However, older and sicker customers are not shared equally across the Irish market, given the relatively recent arrival of competition. This is the crux of the issue. Some insurers have higher risk profiles than others given that they have a much higher proportion of older members. In a competitive community rated market like ours, insurers have a strong incentive to try to attract low-risk people and avoid high-risk people. Claims costs for older people can be up to 25 times higher than claims costs for younger people.

I draw the House's attention to the statement issued by the VHI welcoming the legislation. It stands in contrast to the prevailing narrative that blanket higher premiums are the only inevitable result from making the changes recommended by the Health Insurance Authority, HIA. From the VHI's statement, we can see that this is not the case.

Insurers, understandably, want to attract healthy people and they do this by advertising in a particular way or by offering additional benefits that appeal to younger and healthier customers. They try to avoid people who are more sick by designing products that do not provide services that older and sicker people are more likely to need. We do not want insurers to compete like this. We want them to compete by offering better health insurance products to everyone at lower cost.

To support community rating and reduce the incentives for insurers to target or avoid particular groups of people, some form of risk equalisation is required. This is a policy view that has been shared across many different sides of this House over the past number of years. Community-rated health insurance systems across the world use risk equalisation to share some of the higher costs of older and sicker patients across the whole market. The US, Australia, Germany and the Netherlands are just a few examples of other countries which use risk equalisation to support community-rated health insurance.

Risk equalisation supports community rating by providing cross-subsidies between insurers with different risk profiles. It aims to equitably neutralise the differences in insurers’ costs that arise due to variations in the age and risk profile of the insurers. Risk equalisation is a transfer mechanism whereby money flows from insurers with healthier customers to insurers with sicker customers. The overall goal is to channel competition in the health insurance market in a way which benefits everyone who wishes to purchase private health insurance. Risk equalisation reduces insurers’ incentives to attract only low risk consumers or to charge higher prices for products that are marketed to high risk people.

A permanent risk equalisation scheme was introduced in Ireland in 2013. Under the scheme, credits are paid to insurers for their older and sicker members. These credits are funded directly by stamp duty levies on all health insurance contracts written. The scheme redistributes funds between insurers to meet some of the additional costs of insuring older and sicker members. The scheme is self-financing and Exchequer neutral. It is how we share the cost of insurance between all insured people and ensure that sicker and older people are not unfairly targeted.

As well as sharing the cost of insurance we also want to keep private health insurance affordable for those who wish to purchase it. This is done in a number of ways. Insurers must compete with each other to attract customers. In a competitive market insurers have a strong incentive to manage their costs and offer insurance at the best possible price. Premiums have increased in recent years. The prices of individual policies have gone up. However, the average premium paid by people buying health insurance has not increased to the same extent. By exploring lower cost options with the same level of cover, people have avoided paying very large increases in premiums that they may otherwise have experienced. The State also provides tax relief at source of up to €200 for everyone with private health insurance.

Supporting affordability in an ageing market is a challenge. The Society of Actuaries in Ireland estimates that the ageing of the private health insurance market accounted for approximately 2.5% of the increase in claims costs each year between 2009 and 2015. This consists of ageing of the overall population, a lower proportion of younger people with cover and a higher proportion of older people with cover. The society estimates that claims costs will increase by 1.7% per year over the next ten years due to market ageing. Attracting younger and healthier people into the market reduces the average cost of insurance across the market.

In 2015, we introduced lifetime community rating. Loadings now apply when someone buys health insurance for the first time after the age of 34. This measure has encouraged and will continue to encourage people to take out health insurance at a younger age. We also introduced young adult rates which encourage younger people to retain their health insurance. I am pleased to say that the number of people insured increased last year by over 100,000 following the introduction of lifetime community rating and young adult rates. This also reflects positive employment trends which are a key driver of the demand for insurance. This upward trend continues with a further increase of almost 18,000 in the first nine months of this year.

Legislation is needed each year to update the amounts of credits paid to insurers under the risk equalisation scheme and the amounts of stamp duty levied on health insurance contracts to fund the credits. The Health Insurance Authority carries out an evaluation of the market and recommends the level of credits that should apply in the following year. This analysis is supported by my Department’s actuarial advisers. I have considered and accepted the recommendations made this year by the authority. Higher credits are required under the scheme next year for a number of reasons. Claims costs have increased. Payments to public hospitals have increased as a result of the changes to charging regimes for private patients in public hospitals. The market has continued to age and insurers must also cover the cost of medical innovations in treatments and new drugs. No changes are proposed to the existing level of hospital utilisation credits provided to insurers under the scheme. These remain at €30 for each day case admission and €90 for each overnight stay.

I propose to significantly increase the age-related credits paid to insurers in respect of older people. Increasing the amount of age-based credits provided under the scheme requires changes in the stamp duty levies. The scheme is designed so that the total amount of credits paid out to insurers is matched by the total stamp duty levied on insurers. The stamp duty on health insurance products will increase by 10%. This means that the stamp duty on advanced cover products for adults will increase from €403 to €444. It is important to note that increasing the stamp duty levies does not increase costs across the market. This is a really important point and one which various commentators in the media need to remember. We need to encourage our insurance companies not to use this as an excuse to hike up insurance premiums and we certainly do not need people defending it as an excuse. All money raised is paid back to insurers in the form of credits. Increasing the credits and stamp duties under the scheme is needed to continue to share costs across the market. The amount of any increase or decrease individual insurers pass on to consumers is a commercial decision for each of them, but the money from this scheme and this stamp duty goes to insurers to ensure we continue with our community-rated scheme, which provides support to older and sicker people with health insurance.

In previous years the revised credits and stamp duties have come into effect from 1 March. This year the proposed effective date for the revised credits and stamp duties is 1 April. This change in date will facilitate the administration of the stamp duty collection by the Revenue Commissioners and provide an additional month’s notice to insurers.

While the changes to the credits will help to maintain existing levels of support for community rating, sometimes referred to as the effectiveness of the risk equalisation scheme, I am pleased to note that further improvements are planned. I am committed to making the risk equalisation scheme as effective as possible in a way that promotes fair and open competition. The introduction of a more refined measure of health status for the allocation of credits between insurers is required. Using diagnosis related group data in the future will allow for better targeting of credits to all people who require higher levels of health care. We need to ensure these credits are getting to where we want them in the market. This will further reduce the incentive for insurers to attract low-risk people and avoid high-risk people. Introducing this change will take time, as there are complex data collection and system issues to be addressed. I have asked my officials to focus on progressing this, in conjunction with the Health Insurance Authority, over the months ahead. I am pleased that the risk equalisation scheme was approved by the European Commission earlier this year as a compatible state aid for the period 2016 to 2020. The scheme underwent detailed examination by the Commission to ensure it is administered in a fair and transparent manner and does not unduly distort competition in the market. As part of the process of achieving Commission approval, two changes to the scheme are proposed in this Bill. First, the Health Insurance (Amendment) Bill 2016 provides for a new objective to be considered by the Health Insurance Authority when recommending the level of credits to apply under the scheme. The net projected average claims costs for all age groups aged 65 and over should not be less than 125% of the projected market average net claims costs. This limits the amount of credits that can be provided under the scheme while allowing credits to increase in monetary terms to reflect any claims cost inflation. As Minister for Health, I must also have regard to this objective.

Second, the measure of reasonable profit, used to ensure that no insurer is overcompensated by the risk equalisation scheme, will be defined as an average return on sales, gross of reinsurance and excluding investment income, of 4.4% or less over a three-year period. Using return on sales to measure reasonable profit has a number of advantages over the existing return on equity measure. It is based on easily observable accounting profit and sales data and it avoids the valuation and allocation of assets between different services. These proposed changes to the operation of the scheme will ensure that competition between insurers is protected.

People are naturally concerned about any increase in the price of health insurance. While both the Health Insurance Authority and I would encourage people to keep their options open and compare between insurers to obtain the best value, I also understand that it can be difficult to make a decision when there are so many products on the market. This is a real problem. There are so many products available offering similar benefits at very different prices. It is not easy to pick the best option when so many products are available. The market needs to be simplified. I am pleased to see that the number of products on the market has reduced in the past year from 381 to 354. I hope to see this downward trend continue and encourage our insurance companies to continue to simplify the list of products that are available to customers so that it is easier for them to compare and to contrast policies and their cost.

This Bill provides further clarity for insurers about when they can withdraw products from the market. It also ensures that when people’s existing plan is withdrawn they will be offered a plan which provides at least the same level of benefits as their current one. These proposed changes will mean that the existing lifetime cover regulations are no longer required and I will revoke them in due course.

I will now outline the specific sections of the Bill.

Section I defines the principal Act as the Health Insurance Act 1994. Section 2 substitutes subsection 7AB(3) with a new subsection that provides that insurers cannot change a plan from advanced cover to non-advanced cover or vice versa except on 1 April each year from 2017 onwards. This is a technical amendment to facilitate the administration of stamp duty levies. Section 3(a)(i) is a technical amendment to section 7E of the principal Act to delete the reference to "bed". Section 3(a)(ii) is an amendment to section 7E of the principal Act which provides that the Health Insurance Authority must have regard to the objective that the projected net average insurance claim payment per insured person for a relevant group of insured persons should not be less than 125% of the projected net average insurance claim payment per insured person for all age groups, which is a point I outlined a moment ago.

Section 3(b) is an amendment to section 7E of the principal Act which requires the Minister for Health to have regard also to this objective. Section 3(c) inserts a new subsection 7E(4) which provides for definitions of "net" in relation to the average insurance claim payment per insured person and "relevant age group of insured persons". Section 4 amends section 7F of the principal Act to provide that from 2016 onwards, a reasonable profit for the purposes of determining over-compensation of a net beneficiary of the scheme is defined as a return on sales gross of reinsurance and excluding investment income that does not exceed 4.4 % per annum over a three-year period.

Section 5 amends section 9 of the principal Act to set out the circumstances when a health insurer can withdraw products from the market. It also provides that when a particular product is withdrawn from the market by an insurer, people holding the product being withdrawn from the market must be offered a replacement contract with the same level of benefits, subject to small differences in excess amounts. Section 6 amends section 11C of the Principal Act. It provides for 1 April 2017 as the effective date for revised risk equalisation credits to be payable from the risk equalisation fund. Section 7 replaces table 2 in Schedule 4 of the principal Act with effect from 1 April 2017. The risk equalisation credits payable from the risk equalisation fund for certain classes of insured persons are revised. Section 8 amends section 125A of the Stamp Duties Consolidation Act 1999. It specifics the applicable stamp duty rates from 1 January 2017 to 31 March 2017 and from 1 April 2017 onwards. Section 9 provides for the Short Title, collective citation, commencement dates and construction of the Bill. Sections 5 and 8 will come into operation on 1 January. Sections 6 and 7 will come into operation on 1 April. All other sections will come into operation when the Bill is enacted.

This annual adjustment of the credits and levies under the risk equalisation scheme provides us with an opportunity to reflect on the role of private health insurance in the health service. One of the first priorities I identified as Minister for Health was the need for a long-term consensus on the direction of health policy. To help achieve this, the Committee on the Future of Healthcare has been established to devise cross-party agreement on a single long-term vision for health care and direction of health policy in Ireland. I have no doubt the current and potential role of private health insurance both as a source of funding for the health service and as a driver of the model of care people receive will be considered as part of the committee's work. I look forward to receiving the committee's deliberations. Through the work of the committee, I hope we will be able to clearly articulate our desired model of care, the implications of moving towards it, and how it can be achieved.

We want to move towards a sustainable public health service that all our citizens can have confidence and trust in that they can access the care they need when they need it. In the meantime, we must maintain our support for the core principle of community-rated private health insurance. By revising the credits and the stamp duties required to fund those credits to take account of market trends, we can continue to provide the necessary support to ensure the costs of health insurance are shared across the insured population. We must not fall into the trap of believing spin on this matter. These stamp duties go into our insurers, every single cent of it, to make sure our sicker and older patients can continue to access private health insurance without being penalised for being older or sicker. It is a principle we, as a House, have valued and it is a principle that should not be used by private health insurance companies to exploit customers.

I commend the Bill to the House.

I welcome the opportunity to speak on this legislation. We have had numerous debates in recent years on health insurance. There have been lots of changes in recent years, including legislation, the establishment of the Health Insurance Authority, amending legislation on a regular basis, the establishment of the community lifetime rating and other welcome decisions. The entire health insurance industry went through a very difficult and turbulent time with the downturn of the economy since 2008. We saw drastic numbers of people falling out of the market and the market beginning to teeter on the brink of being unsustainable in terms of the vibrancy and competition in the market. Just as critical to the sustainability of the market was making sure that we had inter-generational solidarity and were able to encourage younger people back into the market. For a long time, there was a downward spiral that was very troubling. As a result of the lifetime community rating and the returning growth in the economy, it has stabilised and we now see the numbers increasing again.

There is an interesting phenomenon in voluntary health insurance in this country. Up to half the population takes out private health insurance cover. They take it out for a number of reasons. Many people take it out because of the fear of the public health system. Let us be under no illusions about that. While there may be other incentives, many people do not trust that if they get sick or require diagnostic services they could get them in a timely fashion through the public health system. It is something we have to acknowledge and try to address as best we can in terms of investing in our public health system. At the same time, we have to acknowledge that there is not a bottomless pit of money and that it has to be found through general taxation in some way.

In addition to taxing to fund the health system, there are other challenges in terms of competitiveness and retaining people in employment. Getting that balance right will be the critical challenge for this House, for Government and for society at large. In the context of the discussions of the Committee on the Future of Healthcare, chaired by Deputy Róisín Shortall, it will be a key challenge to provide a direction and pathway for the public health system in the years ahead and beyond the horizon. At the same time, we have to be honest about how we fund it and make sure it is sustainable into the future. That is a challenge.

Previous Governments announced that they would introduce universal health insurance. It took the ESRI and the Department of Health a number of years to work out how much it would cost. In the end, they were not able to do that effectively and the policy was subsequently abandoned.

What I find fascinating in the context of the debate about health insurance is that very often there is a perception that those who are the most affluent, at the very top, are the only ones who have private health cover. Ordinary working families take out health cover. Pensioners take out or retain private health cover. It is a large chunk of household income in any one year. The reasons for taking it out are myriad. One of the fundamental issues is that they do not trust or have confidence in the public hospital system. That issue has to be addressed. When they are taking it out, they are doing two things: they are protecting themselves and lightening the burden on the public hospital system. If every person who has private health cover had to attend diagnostic clinics or receive treatment through the public hospital system as it stands, it would collapse in terms of capacity and loss of revenue. It is something we have to be conscious of when we are trying to address the challenges in the public health system.

We will not be opposing the Bill. We have to acknowledge this is another hike in insurance premiums. It will cost people more. We have to be conscious that while there is growth in the economy and while there is an increase in the number of people taking out private health insurance, there is also a limit to the ability of people to afford the continual increases.

I want to make some observations on which I might get some clarity from the Minister at some stage. I do not expect it this evening but perhaps he will address them in the discussions on Committee Stage. A big problem with the levy is that it is a flat levy. It is totally socially regressive from a taxation perspective. That is something we should look at. Somebody who pays €700 for a plan has a levy of €440, which is the same as somebody who pays over €5,000. There is no other stamp duty in that context. The cheapest non-advanced plan, which costs €433, has an annual levy of €202, which means the levy is over 40% of the overall insurance premium. The most expensive non-advanced plan is approximately €1,300, which means the levy is effectively 15% of the overall premium.

Now, let us consider advanced plans. The cheapest advanced plan on the market is approximately €655. The associated levy is €403, accounting for 60% of the premium. The most expensive plan is €6,300. Effectively, this means the levy is approximately 6% of that premium. I am keen to hear some observations from the Minister on the matter at some stage. Stamp duty is a form of taxation and if we continue to have a flat rate, then we are penalising those who are only just able to afford private health insurance. Perhaps the Minister can examine the matter in the context of the Bill or of broader policy in the future.

In recent years, when the former Minister, Senator James Reilly, was in the House, we often debated the issue of private health insurance and the fact that premiums were continually increasing. The increase in private health insurance costs has resulted in the proliferation of health insurance policies, to the point where there are currently 354 policies on the market. Thankfully, the number has decreased from 380 or thereabouts. In any event, many people are simply incapable of processing all the information. It is difficult to sit down and assess which insurance premium policy right for individuals and their families. That matter must be addressed and HIA has a role in this regard. I have raised the matter at committee level and in the Dáil on numerous occasions. There should be streamlining of the number of policies available in the marketplace. The difficulty in assessing these policies can be overpowering for many people. Moreover, the policies are opaque and there are small-print conditions in many of the premia as well. There are certain basic requirements but sometimes companies can be imaginative or inflexible in terms of how they present their policies and packages. We should remain vigilant in this area to ensure transparency in how policies are advertised and sold.

Risk equalisation is a concept we support. Indeed, we initiated the idea. At one time Fine Gael opposed it some years ago. That is history, however, so we can leave it behind us. It is a decent concept for society, something that should be supported and encouraged to ensure that we continue to have a sustainable market. The debate is unfolding in other countries too. For example, a debate is under way in the United States with regard to Obamacare and how to potentially change some elements of that system. This could make it difficult for certain cohorts of people with illnesses and pre-existing conditions to access private health care.

Let us consider the marketplace here. VHI is the dominant player in the sense that it has approximately 50% of the overall market share. From a historical perspective, VHI was a monopoly. It carried a historical legacy into the modern market, where there is competition. There is a duty and an obligation on us to ensure this is managed properly because VHI has an older cohort of people. This means that it has a higher risk rating and risk equalisation is the way to address that.

There should be continued vigilance. The HIA must ensure that when it is assessing the marketplace sufficient due diligence is undertaken. Over a given period, we anticipate that the market, the make-up of the various players in the market and the profile of customers would change. This is why there should be continual assessment. Certainly, we have no wish to see cherry-picking of people who are considered low risk. Some of the packages being offered by insurance companies are tailored to attract younger people. As time unfolds, we expect that some people would become more high-risk when it comes to insurance cover. This should be reflected in how the HIA assesses the market.

The figures for the various age cohorts in the market are positive. Over 100,000 people have entered the market in recent times. I assume these are primarily from the younger cohort of individuals because of lifetime community rating and the upturn in the economy.

Other issues arise when we talk about private health insurance, private health care and the vibrancy of the market. We have to accept that 50% of people have some form of private health insurance. In that context, a broader issue arises in respect of how we provide services to people through the public health system. As the Minister is aware, we requested an extra €15 million for the National Treatment Purchase Fund for the purchase of additional health care for people who are on waiting lists. For the foreseeable future we must ensure that the National Treatment Purchase Fund is adequately resourced to enable it to buy health care, whether through the public hospital system by supporting public hospitals to expand their capacity or by buying private care.

I have raised the issue of scoliosis today already by way of a Topical Issue. I thank the Ceann Comhairle's office for facilitating me in that regard. I read three cases into the record and I have information on two more. Some of these cases are harrowing. The Government must be imaginative. I am in no way trying to be partisan or political. We must be imaginative in how we address this in the coming weeks and months.

The winter initiative has invested €2 million in this area. However, there are children aged five, six and seven years of age who have been waiting an inordinate length of time for life-changing surgery. If they do not get it, this illness will limit their lives. It is as serious as that. We have heard of cases involving children who had a spine curvature of approximately 35%. However, by the time they got to surgery, it was over 100%. That is an example of the severe impact of waiting times. I know of a case involving a child who is six years of age. The child can no longer retain his food because of the pressures on his stomach due to the curvature of his spine. That is an indication of the serious nature of this matter. I urge the Minister to address this. I have no monopoly on compassion. I urge the Minister to look at this in the most creative and imaginative way possible. I know the Minister has had contact with these families as well. The difficulty needs to be addressed quickly for this cohort of people on waiting lists. These people require surgery now. I will continue to raise the point in the hope that the Minister, the HSE and Our Lady's Children's Hospital Crumlin can use imaginative ways to speed up access to this life-changing surgery.

I recognise that commitments have been made for new theatres in Crumlin and the winter initiative and everything that flows from that. However, having examined the calendar and dates for these policies to be implemented, it is clear many of these children will be subject to severe and long-term damage while they are waiting. Some of the dates in question have been kicked out to July 2017 because of recruitment of additional consultants, etc. I understand that there are difficulties with the recruitment of theatre nurses but I believe the Government could be imaginative. If it is proving difficult to recruit on a long-term basis, then perhaps there could be some form of short-term contracts to bring in staff on a short-term basis. I am sure that with imaginative packages something could be done to bring in theatre nurses for these specific cases. We could recruit paediatric theatre nurses and additional consultants for several months to try to front-load the activity and capacity in Crumlin to address this particular issue. I urge the Minister to take action on that issue.

We will not oppose the Bill. We have always supported the two concepts of inter-generational solidarity and risk equalisation. The legislative programmes that have been brought forward in recent years seem to be working in this case.

In future, when the HIA makes recommendations the associated reports should be published as well.

When a report is being acted upon and when we bring forward legislation in this House, the very least we should have is the report on which the legislation is based so that we can make an informed decision. While we do not distrust the information the Minister gives us, at the same time we would like to see the reports. Reports on which legislation is based should be published as a matter of form. If there are challenges in the insurance industry and the broader private health insurance market, we would like to be able to see a report to that effect to make our own assessments of it.

Overall, this Bill will increase premiums and that will place additional pressure on families. I urge the Minister to consider the regressive nature of the stamp duty in that regard. Perhaps some tweaking is possible to lighten the burden on those who are already struggling to hold private health insurance and move to a situation in which those on higher premiums, who potentially have more flexibility in their disposable income, be considered as well. However, we must remember that there were tax reliefs and changes in budgets presented by the Minister for Finance, Deputy Noonan, in previous years which at the time were described as gold-plated insurance premiums and so on. There is no doubt we must accept that this policy change impacted on the cost of private health insurance for ordinary working families as well, even though it was said at the time that it would not have that impact. Sometimes people in their contributions on private health care put forward the view that the people who take out private health insurance are just the affluent and those who try to queue-jump and that there are gold-plated circles. There may be people who have substantial sums of money in this country, but when one considers that half the population takes out private health insurance, it must be acknowledged that these are just ordinary working families. As I said, they take it out for many reasons, among which the fact that they do not have confidence in the public health system. We must collectively address that in this House. I would like to reach a stage at which private health insurance is seen as something to be availed of not out of fear of a public health system not being able to deliver but because those who are insured want additional services available, as opposed to the basics, namely, treatments and diagnostics.

I look forward to the debate on Committee Stage. I ask the Minister to consider the regressive nature of the proposed duties.

Tá 20 bomaite ag an Teachta Louise O'Reilly.

I do not think I will need the full 20 minutes.

We can all agree that the main deficiency in our health system must be the absence of universal health care. Unfortunately, this continues to be reinforced by the Government and its backers in Fianna Fáil. Despite the fact that my party colleague, Deputy Caoimhghín Ó Caoláin, has repeatedly raised the inherent inequality in our health system each year during debates on consecutive Health Insurance (Amendment) Bills, that inherent inequality has been allowed to flourish. This happened on the Government's watch and on that of Fianna Fáil. Rather than finding ways to navigate a way out of a reliance on a two-tier system, it appears that oxygen has been given to the private sector at the expense of vital investment in public health services.

This morning, the CEOs of the hospital groups attended the Committee on the Future of Healthcare and spoke to us about stretch targets. I was not exactly aware of the detail of these stretch targets but I was mostly interested in what the CEOs will do if they do not meet these new targets. In the context of cutting services and cutting back, I specifically asked how they will determine what will be cut. There is a target. The Minister has been very clear that he will set targets for hospitals. Those hospitals that do not meet their targets will have to face the consequences. In truth, the patients will face the consequences. I asked all the CEOs and representatives who appeared before the committee how they would determine what gets cut. One of the replies was that they would cut the fat from the system. There is no fat in the system. Fianna Fáil started cutting it a long time ago and Fine Gael has continued the process. There is no fat in the system to cut, so these stretch targets, when they fail to be met - as they very well might - will end up resulting in cuts to front-line services.

Successive Governments have failed to introduce universal access to our health service based on medical need rather than ability to pay. Many critics noted that the introduction of lifetime community rating in 2015 made the health system less universal. This was because penalising people over the age of 35 for not taking out private health insurance exacerbates the two-tier health system we have all apparently set out to dismantle.

During the course of the meetings of the Committee on the Future of Healthcare, we have had the benefit of listening to the expertise of some very eminent professionals, academics, researchers and practitioners in the health service. Having seen all the evidence presented to us, it is clear that those who will suffer will be the poorest, the sickest and those with disabilities. These are the people who find it most difficult to pay charges, no matter how small those charges may be, and who are obliged to wait longest to access care.

This leads me on to the private health insurance market, which will continue the scandal of two-tier access to health care. The diminishing minority who can afford private health insurance get to jump the queue. That is a fact. That is why they buy it. They buy it because, as Deputy Kelleher rightly pointed out, some of them do not have confidence in the public health system. They do not have confidence that they will be seen when they need to be seen, so it is not selfish on their part. I think it is borne out of fear rather than anything else. They take out private health insurance because they fear that the public health system will let them down. That is very unfortunate.

Inability to pay continues to deny people access to the opportunity to lead full, long and healthy lives. That is a fact. We need to increase investment in the public health system and directly challenge and eliminate the structural inequalities in it. The current heavy reliance on private health insurance will not facilitate that. The Minister knows it will not. It cannot. As I read the transcripts of successive debates relating to health insurance legislation, it became strikingly obvious that the Government has no roadmap to address this inequality. It looks like more of the same: leave the private insurance market alone and retain two-tier health care access. This State, as a relatively high-income OECD country, is unique in having managed to marry private health insurance with its public hospital system. People who can afford to pay privately can get their diagnostic tests more quickly, get to see a specialist more quickly and, if they have the right kind of insurance, might even be able to get their treatment more quickly.

When she was before the Committee on the Future of Healthcare earlier this year, Dr. Sara Burke advised us that the policy analysis work undertaken by her and others, which was published at the end of last year, found that despite the rhetoric and the intention of increased universalism between 2011 and 2015, there is in fact less, not more, universalism now than there was in 2011. This is due to the further increase in drug charges for people with and without medical cards, the introduction of lifetime community rating and the failure to reduce waiting times for access for public patients. For individuals earning annual €17,000, €35,000 or €65,000, the purchase of an average private health insurance premium at the rate of €1,200 per annum takes up 7%, 3.4% or 1.8% of their incomes, respectively.

One of the most striking parts of Dr. Burke's presentation was her analysis of 2009-2010 data exploring the extent of affordability of private health expenditure and what proportion of Irish citizens is financially protected and what proportion is not when they access health care. The analysis found that the poorest 40% of the population spent the most on private health insurance, yet the Government has no plan to redress this. Universalism is regressing, but we see no roadmap. The Committee on the Future of Healthcare is tasked with designing one but, as I have said before - the Minister will be well aware of my comments in this regard because I have voiced them on a number of occasions - I fear that while we are in one room trying to figure out a ten-year roadmap for universal access to health care based on need rather than ability to pay, the Government is busy in another room actively undermining any hope we might ever have of achieving it.

The Minister can shake his head but we have seen this and other examples which repeatedly show that inequality will deepen while we are in a room talking to people and trying to work out a roadmap in order to resolve the position. It is a case of us perhaps taking one step forward but being dragged two steps back by the actions of the Government.

We know, internationally, that insurance-based systems are more expensive and cause inequalities. In Ireland, 45% of our population has private health insurance but it contributes less than 10% to the overall health budget. This matter was raised at a committee meeting with representatives of the Economic and Social Research Institute. In the explanation as to how 45% of the population has private health insurance when it only contributes to 9% of the cost, Dr. Burke explained it is because private health insurance in Ireland largely insures someone for inpatient or day-case elective procedures. It does not cover most other issues. For example, it does not cover outpatient care generally, outpatient appointments with specialists in the first instance, the cost of drugs or most primary care payments. In effect, what we have seen is that this insurance is inpatient hospital insurance that people are scared into taking because it gets them faster access than they fear they will get via the public system.

Nobody could disagree that this is a blatant example of very poor value for money. It indicates that the public system is subsidising the private system because 45% of the population has private health insurance but the majority of the expense of health care is not paid for by private health insurers. Nowhere near 45% of the cost is paid by private health insurance. So why are we perpetuating this? Why has the Government not made any moves to break this self-fulfilling cycle of failure? I do not know.

Nine years ago, Ms Susie Long died from bowel cancer after a seven-month delay in getting a colonoscopy because she could not afford private health care. Before her death, she was very brave. The Minister is aware of the case, as I was, and I happened to listen to her on the Joe Duffy show when she spoke. It would have broken anybody's heart. She was very critical of the politicians in charge of the health system at the time and stated, "all they can think to do is put resources into privatisation". How far have we come in the intervening nine years? Honestly, how much progress has been made and how sure would we be, sitting here this evening, that there will not be another example like Susie Long? How is promoting private health insurance a step towards universal health care? How is perpetuating this market and subsidisation of private insurance in Ireland benefitting the public health services? It is not. It is exactly the same principle as the argument we had here when we discussed pay increases for Deputies. Out one side of the mouth comes the wish to prioritise low to middle income workers but this is done by giving people who earn €87,000 per annum a €5,000 pay increase. It is counter-intuitive and we are not fooling anybody if we think people cannot see that.

Our public services are underfunded and we cannot retain or recruit staff. The Minister may quote all the statistics he likes but the chief executives this morning stated they cannot retain or recruit staff. Even the staff they can manage to entice to work here do not find the Irish health service an attractive place to work. That is a fact. Although part of the issue is money, it is not all about funding. The Minister knows that. We cannot attract and retain the bring young people we should be. Most of these people want to work in the public health service. I visited student nurses in universities who wanted to stay here and work but they felt they could not do so. The issue is not just with nursing as there is a crisis throughout the health service with staff. There is also a crisis with waiting lists. This morning there were 528 patients on trolleys or awaiting admission to our hospitals. That is just unacceptable.

Before I conclude, let me respond to the much-publicised measure in this Bill, the introduction of a 10% increase in health insurance stamp duty levies, a move likely to lead to further price hikes for subscribers. In the media at the weekend, the Minister was reported as saying companies should "think carefully" before passing on these increases in stamp duty and that the legislation was "necessary to maintain a stable and sustainable health insurance market ... This is the way in which we ensure that everyone pays the same for their particular plan, regardless of age, health status or gender." If the Minister really believes that increases are not going to be passed on to consumers in some way, he is being somewhat naive. The reality is that when one does business with private companies, profit is their underlying motive and a few well-meaning words will not cut it. A private company exists to make money and any opportunity to make more of it will be grabbed with both hands. I am sure the Minister's intentions are good but asking people not to do something will not have the desired effect. I hope it will but it will not.

I was struck when the Minister indicated the need to maintain stability in the health insurance market. We have an ailing public health system, massive public waiting lists, repeated trolley crises, failures to recruit and retain staff and primary care that leaves a lot to be desired, yet we are concerned with the stability of a for-profit, private market. That is unbelievable and not what people want the Minister to do. They do not want him to spend his time worrying about providing stability for private health insurance companies. Good luck to them but they are private companies. Let them off. The Minister should be worrying about the public health service and the people depending on it.

If we want to ensure equality in our health service and that people get access to health care based on need, we need universal health care. Sinn Féin is committed to the realisation of a world-class system of universal health care, accessed on the basis of need, free at the point of delivery and funded by progressive taxation from the Irish State. This Government clearly is not so committed. In a short period, the Committee on the Future of Healthcare will report. I do not yet know the blueprint that will be proposed or if consensus can be reached. I genuinely hope we can reach that consensus. I have heeded a great deal of advice during the course of the proceedings and much of this points to the need to disentangle the private activity from public health services and invest in our public services rather than relying on the private sector. I hope that next time we come to this House with a Bill of this nature, we will have such a plan. It is counter-intuitive to say we want to disentangle private involvement in our public health service while saying we are very concerned about the stability of private companies.

Despite the rhetoric of universal health care, the reality is that the Government's measures are mitigating against universalism. In its Better4Health document launched last year, Sinn Féin recommended an end to the special treatment of private patients in public hospitals by incrementally eliminating private activity and replacing the revenue lost with increased public funding to their core activity budgets during the lifetime of a Government. The HSE estimated, in its 2014 submission to the consultative forum on the health insurance review group, that, "the private health insurance market generates roughly €500 million per annum for the statutory and voluntary hospital system". Sinn Féin would make an additional investment of €100 million, rising to €500 million annually, for the core activity budgets of public hospitals to replace the revenue streams from private insurance. The first three years of this funding increase would be covered by a corresponding incremental reduction in tax relief on private health insurance, on which €355 million is currently expended.

My party and I are serious about ending the two-tier system of health care access that is currently in place. This Government, backed by Fianna Fáil, clearly is not as serious.

Deputy Gino Kenny is sharing the next slot with Deputy Barry.

It looks as if I am jumping the queue as the Labour Party Deputies are not here.

Does the Deputy wish to contribute now?

Yes. Private health insurance is part of Ireland's two-tier health system.

Health insurance is a way for people to jump the public queue for health care, particularly elective surgery and investigations like scopes and scans. This distorts our health service by prioritising health care on the basis of wealth and not medical need. As this means the most needy get more sick as they wait, it causes unnecessary suffering. Those who jump the queue onto consultants' private waiting lists are seen more quickly by those consultants because decisions on who sees consultants are not made on the basis of need.

In 2011, the Fine Gael-Labour Party Government that was in office at the time promised to bring an end to the two-tier system by putting everyone on private health insurance. The proposed system of universal private health insurance, or UHI, was not costed by Fine Gael until very late in the day. By 2013, it was a flop. It was prohibitively expensive at approximately €3,000 per person. A system of private health insurance distorts the way patients are seen. It sucks out money in profits, advertising, corporate salaries, bonuses and transaction costs. The billing, accountancy and legal costs associated with private health insurance are above and beyond those encountered in the public system, where the bill is one's tax bill. UHI collapsed, not surprisingly, and Fine Gael still has nothing to put in its place. Instead, we have the ongoing sticking plaster of a wasteful and inefficient supplementary private health insurance system that is propped up by tax breaks. The National Treatment Purchase Fund is continuing to sell patients on public waiting lists to private hospitals, often to be seen by consultants who have their own public waiting lists.

Private health insurance should be replaced by a system of universal health care as advocated by the Anti-Austerity Alliance-People Before Profit. If this does not happen, the current wasteful and unwieldy market system will continue to need constant attention and intervention by the State to prevent the overcharging of sicker and more elderly patients as part of the system of risk equalisation, which involves redistributing payments between different private health insurers. This system of health insurance, tax rebates, stamp duty and credits unnecessarily complicates the health service. It also duplicates the functions of the taxation and funding systems of the Departments of Finance and Health. In 2016, private health insurance covers 46% of the population. This represents a reduction from 51% in 2008. Many of these policies offer very limited cover, usually for hospital overnight stays and accident and emergency charges. The decrease in the number of people paying for health insurance is largely due to reduced incomes as a result of austerity and the mass emigration of our youth. It is estimated that the large private bureaucracies of the private health insurance companies and the Health Insurance Authority handle €2.45 billion a year. That money would be better and more efficiently spent as part of the public health system.

The community rating system that this Bill is designed to regulate through risk equalisation payments has been described as being designed to promote "intergenerational solidarity" regardless of "age, gender or health status". Anti-Austerity Alliance-People Before Profit strongly recommends this social solidarity, but equally strongly it points to the waste associated with private health insurance and the distorting effects it has on our health system. The use of progressive taxation to increase the tax rates paid by the richest individuals and corporations would fund equal access and improve health by reducing inequality. The sooner private health insurance is replaced by a national health service, the sooner all of this wasteful, complex, time-consuming and ultimately unnecessary regulation will come to an end. The two-tier health system is bad for everybody's health.

This legislation proposes to make several changes to the law on risk equalisation between insurance companies, to regulate the health insurance market and - this is the main element of the Bill - to increase the health insurance levy on health insurance premiums by 10% from April of next year. I understand the Minister wrote to the insurance companies to plead with them not to pass on this increase to their customers.

No, I did not.

Okay, the Minister did not write to them, but he made an appeal over the airwaves asking them not to pass on the increase to their customers. I would say the executives of the health insurance companies probably cracked up laughing when they heard that appeal. As a result of this Government's refusal to introduce price freezes or ban the private health insurance companies from passing on the increase provided for in this Bill, it is certain that the companies in question will hike insurance premiums next year. Penny for penny and pound for pound, this will mean insurance policy hikes of between €20 and €41 per adult and between €7 and €14 per child. Health insurance price hikes are now more or less equal, in percentage terms, to increases in rent rates. Rents increased by an average of 11% last year. Health insurance premiums are in the same general field. This comes on top of average health insurance price hikes of 63% in the period from 2008 to 2015. The Fianna Fáil leader, Deputy Micheál Martin, said the other day that he supports wage restraint and argued instead for bringing down living costs as a way of assisting hard-pressed working families. Just days after those comments were made, Fianna Fáil spokespersons are expressing their support for a Bill that will lead to a 10% hike in health insurance costs next year.

That is not what the Bill does.

I think it is glaring hypocrisy. The reality is that the impending health insurance price hikes demonstrate the need for pay increases for all workers.

Trade union action on behalf of working people in the public and private sectors is fully justifiable, given the pay cuts of recent times and the sharply rising cost of rent, car insurance and, as we are debating tonight, health insurance etc. This Bill underlines the urgent need to establish an Irish national health service to provide universal health care that is free at the point of use and is funded from general taxation. An Irish NHS would represent a sharp break with the current health service model, which is increasingly based on and relies on the for-profit element. An Irish NHS should draw from the experience of the model used in Canada, where private practice is illegal in most areas. This eliminates the need for private health insurance. I understand that a health expert, Professor Charles Normand, has estimated that the cost of replacing health care covered by private health insurance with public spending would be between 5% and 7% of total health spending, or between 7% and 10% of current public health spending. We could close this gap and widen the basket of services significantly beyond the level of service currently covered by health insurance premiums by introducing a genuinely progressive tax system that makes the super wealthy in this society pay tax bills which correspond with reality. Even though 46% of people had private health insurance at the end of last year, the private health insurance system contributes a mere 9% to the overall cost of health care. By contrast, the State pays a whopping 77%. A health expert, Dr. Sara Burke, said recently that "this shows that the public system is subsidising the private system". It also shows how inefficient reliance on the private health insurance model actually is. It gives us an idea of the level of profit-gouging that is being carried out by the insurance corporations. The scandal of health insurance profiteering further underlines the merit of the clear and overwhelming case for an Irish national health service.

I understand what the Minister is trying to do with this Bill. It is to be welcomed within the restricted criteria.

Insurance companies should not be able to pick and choose the age group or what illness they will treat. Within that restricted area, I see what the Minister is trying to do but it will certainly lead to hikes in premiums.

One cannot discuss this Bill without putting it against a background. Since the day I came into the Dáil, I have raised the Galway situation, not parochially, but as an example of what is happening to our public health system. I am disappointed in the Minister, even though he is not that long in office. I have repeatedly drawn this to his attention. Let me preface my remarks by saying I firmly believe in public health. I agree with previous speakers who have argued we are subsidising the private system. We have been subsidising the private system during my entire life as a local councillor and in sitting on the health board since 2006. Every single initiative from this Government, the previous Government, the Government before that and, in particular, the Fianna Fáil-PD Government was to subsidise the private system in every way possible. This was particularly the case with regard to councillors rezoning land to facilitate private hospitals and with regard to initiatives like the National Treatment Purchase Fund, which channelled public patients into the private system and accounted for a substantial amount of the profits made by the two private hospitals in Galway, in particular the one at Doughiska. Without that public money, that private hospital would not have made a profit.

I was tired tonight and was not going to speak on this Bill. However, I could not miss the opportunity, on behalf of the people of Galway who have elected me, and those in this country who believe, like I do, in a public health system, to keep putting pressure on the Minister in regard to private health insurance. I feel for those paying private insurance because they really believe they have no choice. It is based on fear, not on privilege, although they seek a privilege. All of us holding insurance seek that privilege to get quicker access but I do not blame people for that, such is their lack of trust in the public system.

Practically every week for the last seven weeks, the nurses in Galway have pointed out that the hospital is on code black. Code black is the highest level of warning in regard to what is happening in Galway hospital, which is known as a centre of excellence and looks after a region with a population of some 1 million people. I will give some figures to make a general point. On 11 November, there were 52 patients on trolleys and a 13 hour backlog was reported in the emergency department. At 4 p.m. that Wednesday, a 90 year old patient had entered her 80th hour on a trolley waiting for a bed. Staff were operating out of a single cubicle in the department to deal with life and death cases as all other cubicles in the 12 unit facility were taken up by patients in a queue for the wards.

I raised this with the Taoiseach last week but his reply made no sense. I actually printed out the reply to see whether I was mistaken but he made absolutely no sense when I asked him to step outside the rhetoric and bland assurances and deal with the crisis in Galway. The reply he gave is on the record and it made no sense. On that day I noted there was a full capacity protocol in place every day in the Galway hospital and code black. At the time I raised the issue, four people required access to the resuscitation room. In other words, there was a queue and a waiting list for resuscitation in Galway hospital, a centre of excellence which serves counties Donegal, Roscommon, Galway, Mayo and other counties. Elective procedures and cancer clinics are cancelled on a regular basis. Somebody who has an appointment on a Tuesday might get a phone call on a Friday evening. Irony of ironies, a warning was given out, stating: "Please only attend the emergency department in the case of emergencies."

Savita, as we know, died tragically at the end of 2012. Subsequently, recommendations were put in place, including additional staff. Since then, two senior midwifery experts have resigned and the statement from Saolta was that it was concerned. We have no idea what has happened in that regard. On 15 October Galway Bay FM newsroom stated:

A review has been launched at University Hospital Galway after an amputation was performed in a general ward yesterday. Medical protocols normally require that amputations take place under sterile conditions and under anaesthetic in a scheduled theatre. Saolta says it cannot outline the circumstances of the incident due to patient confidentiality but it has confirmed that the incident did occur on Friday.

The report referred to an inquiry but I am not sure where that inquiry rests at the moment.

Why is this happening? It is because there has been a sustained running down of the public hospital in Galway and other public hospitals in this country, while at the same time there has been a sustained investment in private hospitals. It is quite extraordinary that the Taoiseach was in Galway lately and he said he would visit the hospital when he had time. Prior to the election, he described the accident and emergency unit as not fit for purpose. The leader of Fianna Fáil described it as not fit for purpose. Post-election, the Taoiseach said he would visit it when he had time. Fine Gael had time to visit Galway and open a new wing, new ward or new something in the private hospital in the last 14 days but it did not have time to go into the public hospital and witness at first hand what is happening.

I understand a presentation was made today to the committee in regard to the need for a new hospital. I have repeatedly asked the Minister and the Taoiseach about a new hospital for Galway, and I have been told repeatedly, including in a bland reply on 12 July, "There are no plans for a new hospital to be built in Galway". I have raised this consistently since then. To be fair to the Taoiseach, when I raised it on 9 November and asked about a new hospital, he replied:

The Deputy has asked me to confirm the status of a new accident and emergency department and a new hospital. A new accident and emergency department was built at Wexford hospital, which is in Deputy Howlin's constituency.

That is the beginning of his reply. He then talked to the Ceann Comhairle because, naturally, I was being a bit obstreperous after a reply like that about Wexford. He next told us: "There are no trolleys in the emergency department at Wexford hospital." I do not know what the Taoiseach was saying. I think he was speaking English but perhaps the Minister can translate it for me. In any case, that was the reply.

I have asked on this consistently since I came into this House. The reason I have done this is, first, because of my own personal experience with family members, second, due to my experience as a local councillor sitting on a health forum consistently asking four questions every two months and, third, because finally last year the clinical director and the manager of the hospital said a new hospital was essential. They said the lack of capacity in the regional hospital was the No. 1 risk factor on their risk charter. That urgency of a new hospital in Galway was repeated today in the presentation to the committee.

I do not know how often we have to say it. Unfortunately, I will be coming back to a further investigation that has just been completed in Galway in regard to another very serious matter that has arisen in addition to the ones I have mentioned and in addition to the case of Savita Halappanavar.

To make a general point, I think we in this Dáil are all lessened if we do not have a public system for everybody.

If our health services are based not on need but on ability to pay or to have private health insurance we are in serious trouble as a civilised society. I have seen no attempt, apart from the committee which we all agreed to set up, to examine the health service in any urgent way or to commit to a public health service based on our taxes that will provide the service based on need that we all deserve. Private insurance should be for private hospitals and for those who wish to have a special room or suite. We want a first class health service and not to go from crisis to crisis and channel public money into the private system as we have done consistently and not clap ourselves on the back for putting €20 million or €30 million into the National Treatment Purchase Fund. I have watched that and the special delivery unit and have kept a close eye on the profits of the private hospitals based on public money. I appeal to the Minister to visit the regional hospital in Galway, not to see the accident and emergency unit, which is a symptom of the overall problem of overcongestion on an overcongested site, in respect of the car park and the services. Every good doctor down there has admitted that and despairs of the constant talk of the crisis there. I appeal to the Minister to commit to the planning of a hospital on the 150 acre site in Merlin Park, which is a stone’s throw from the regional hospital.

He should commission an immediate and urgent report on what staff are necessary to provide a public health service in Galway. In the past two weeks patients were scheduled for procedures related to kidney stones and other problems but because the theatre was closed the consultant in charge gave the patients the option of going in his car to the private hospital for the procedure. They willingly took him up on this and went in his car to the private hospital and returned to the public system in an ambulance and were discharged. They were delighted.

I have no idea what the Minister has done since I asked him about the building of a new hospital. He assured me he was meeting management which came out publicly today to say what was said months ago about the need for a public hospital and the fact that the regional hospital is not fit for purpose. As a result, the staff are under enormous strain and mistakes are being made. I will return to this point next week. Can the Minister hear that? It would be something to hear it and it would be marvellous if he committed to a public health system and private health insurance for private hospitals if that is what people want. We should have a public health system provided by our taxes and the Minister should take on board that the regional hospital in Galway is not fit for purpose, and that is not just the accident and emergency unit.

I am grateful for the opportunity to speak on this Bill. For the past few years when new insurance companies moved into the health sector elderly people were treated differently because of their age and young people got away lightly. The insurers were taking the low-hanging fruit, which would not cost them. Something had to be done to regularise that but the levy for an ordinary family on an average wage struggling to pay a mortgage compared with the levy a millionaire pays is disproportionate in terms of the type of cover each can afford. That needs to be examined.

Many people use the private health service out of fear. Any person with young children will save their last few euro to make sure their children are not waiting in accident and emergency departments for a full day. They scrimp to give their children something they may not have had and out of fear that something may go wrong. The Minister is not long in his job and nobody is going to wave a magic wand in the health service overnight and solve the problem which has been going on for years. I know from talking to the Minister that his heart is in the right place. Whether in the private or the public sector, until we take on the hidden agendas in the health service we will never solve it. Sometimes people involved in the health service speak out of both sides of their mouths and that is difficult for any Minister. Until somebody faces them down and sorts this problem out I cannot see it being solved quickly no matter how many of us speak in here. There are plans afoot for the primary care centres to do more. Machines around the country are lying idle because someone disputes whether they should work a double shift or work late at night. In private hospitals X-rays are done at 11.30 p.m. or midnight. This is where they win. I come from a sector that constantly uses machinery. If a machine is bought and there is a big backlog of work whatever resources are needed are brought in to work triple shifts if necessary to make sure the backlog is taken away. We can talk until the cows come home but unless something like that is done and people work with everybody it will not be solved.

Health insurance costs go up every year and people cannot afford to pay more every year. Where is efficiency coming in? Where is the joined-up thinking? With the amount of money that goes into the health service we should have a gold plated service but unfortunately with the way it has been mismanaged many people are, sadly, left in a bad way.

The headlines every day in Ballinasloe and Galway are about the chaos in the accident and emergency departments. We have to consider people who may unfortunately have cancer and have to travel 300 km each way from Donegal to Galway on bad roads. There is no joined-up thinking to find a solution maybe in Sligo or in Altnagelvin to help them. Let us think of a wider area and make sure those people will not have to make the harrowing journey to Galway. I am fully in favour of centres of excellence. I am not saying we should be going to every place in Ireland but surely there is some way of bringing sick people fewer than 300 km each way to get the help they need.

For every Deputy in this Dáil, both Government and Opposition, there is a young child born that needs special attention. There is great work done. Let us not condemn everything. Once one gets inside the system, there are great consultants, nurses, doctors and others. Phenomenal work is done by those people. However, getting in those doors is the big problem. Unfortunately, whether it is a heart bypass, a hip replacement or another treatment, Merlin Park is the same. In the last fortnight, I saw youngsters for whom an X-ray machine is needed as they require dental work. The machine was broken. In fairness, a new one has replaced it, but the backlogs are not being dealt with. We could spend money and subcontract the work out to the private hospitals under the National Treatment Purchase Fund. We could do something like that for a while to get rid of those backlogs. There are an awful lot of youngsters that need to be seen, be it for dental work or ear or eyesight issues. There are many elderly people who are suffering day in, day out with knees, hips and different things that need to be treated.

There is a problem with health insurance. There is one aspect that is not in the average run-of-the-mill policy that would enable someone to prevent a problem happening. If one wants to go for a medical, one must pay for it out of one's own pocket. If insurers were forward-thinking and trying to save themselves money, there would be some system or initiative that would allow people in their 40s or whatever to have a medical every year or two years to make sure of their health down the road. A stitch in time saves nine. A lot of expensive treatment can be saved if something is identified on time. I would urge that something like that is brought in to insurance.

There is another issue I would like the Minister to address, although obviously he will not be able to address it in this Bill. In the commitments in the programme for Government, there is a review of the helicopter service. I saw last week that the health service in Northern Ireland is after getting a helicopter in memory of a doctor, I think. It is my firm belief that two helicopters are needed in the Republic of Ireland to make sure that there are options for those areas that an ambulance is unable to get to within the designated time. I believe that should be moved forward as quickly as possible. The Minister is six months in the job now. I would love to hear him say tomorrow that he is starting that review, because we need it. No matter where one lives, whether it is three hours from an accident and emergency department, like some people in Roscommon, or right beside one, everyone deserves the same health care and treatment.

I know there is congestion in many of the hospitals at the moment. As Deputy Connolly said, it stands to reason that if an accident and emergency department is closed down, more people are obviously going to go to other hospitals. Whether it is Ballinasloe or Galway, traffic congestion and parking are major problems. Thankfully, Roscommon hospital has become very busy with what has been put into it. However, there are serious problems with parking around Roscommon hospital. At the moment, people going to the hospital are actually parking up at the Hyde Park GAA pitch. This is not an ideal situation for elderly people who may be going into the hospital for an appointment. It is not suitable and it needs to be addressed.

I know a review is being carried out on mental health services. Unfortunately, that review which will include Roscommon mental health services has not come out yet. I would welcome that being published. We have had difficulty in Roscommon. I do not know whether Ministers did not know what was going on or whether the HSE was not telling them. The new system has patients living in the community, which everyone agrees with, provided the patient is fit to live in the community. Unfortunately, instead of contacting their families, giving them a liaison officer and the right to say "no", patients in certain parts of the country are being pushed out into the communities. That is not the way to treat the people. The way to treat them is to work with people and their families to make sure the health service is doing the very best for them, and not telling them where they are going and wrecking their minds day in, day out. This is especially true for people who are vulnerable. What went on in the last six weeks in our area with some people is intolerable. We had a meeting with the HSE and, in fairness, it seems to have started to listen to what we have said over the last couple of weeks. However, there is no good in the HSE telling the media it is doing something when Deputies on all sides of the House hear a different story about the situation from the people affected.

Another issue that needs to be dealt with is the rates charged and the costs. Bills that come back from hospitals, VHI, Laya or whatever insurance supplier one has are phenomenal. There should be some system to evaluate what it actually costs. One can get a hotel bed in Dublin for €100 a night. However, a hospital bed is €1,000 a night. I know that more equipment is needed and I understand all that, but, my God, there seems to be a serious problem.

I echo what Deputy Connolly has said about the chaos above in Galway. Nurses and doctors will tell the Minister that it is a place where no one wants to go. Some people would rather stay at home than sit in an accident and emergency department for maybe 12 or 14 hours, through no fault of nurses or doctors. Patients could be on trolleys for two or three days. This has to stop. There are ways of doing it. I know that the Minister has tried to solve the problem over the last few months with the winter initiative but there is a serious problem there. Perhaps the solution is step-down care for patients who would be fit to go to another place, be it a nursing home or a respite home for a few weeks. There are plenty of nursing homes in Galway and Roscommon that would be able to look after people.

The seven-day service in some of the category two hospitals was discussed in the programme for Government. I know that no hospital is being singled out as the Minister outlined that in the programme for Government. There are a few hospitals around the country that it relates to and I ask the Minister to speed up that process, because it could be helpful in solving the overall problem.

There is another issue that has not been addressed. If an elderly person twists his or her ankle in Dunnes Stores in Roscommon and ends up lying on the ground, someone might not know what is wrong with him or her and, out of the goodness of his or her heart, might dial 999. If someone dials 999 at the moment, the ambulance will have to go past the hospital that is able to cater for minor injuries and bring the person to the accident and emergency department in Ballinasloe or Galway.

There should be a system in place to provide for greater discretion for paramedics, who are great people at what they do, and advanced paramedics at least should be able to make a call on whether a person really needs to go to an accident and emergency unit or if they could deal with them. If we keep putting everyone in the one place it is inevitable that the system will get bunged up. If a person needs an X-ray and he or she can go to a category 2 hospital that is what should be done, rather than an ambulance bringing a person elsewhere and then perhaps two hours later a family member going there to bring the person home again. That does not make a lot of sense.

If someone has a heart attack he or she needs to go to an accident and emergency unit or a hospital that can handle it, for example, University Hospital Galway, but if a person breaks his or her ankle then Merlin Park University Hospital should be well able to handle it. We need to ensure we are not bunging up the system with problems that could be sorted in other hospitals. Unless we do that, we will not solve the problem.

I understand the Minister is required to introduce this measure to ensure elderly people will be treated fairly, but I urge him to take on board what we have said. In fairness to Deputy Connolly or any Deputy from the west, sadly, we are aware of the amount of reports coming from Galway, although once people get into any of the hospitals then we hear good things. The accident and emergency unit in Ballinasloe hospital needs attention. We must ensure we keep that hospital working properly.

I urge the Minister to do what I asked him in terms of the items relating to Roscommon that are included in the programme for Government. Above all, I urge him to expedite the introduction of a helicopter service in certain parts of the west, not just in the constituencies represented by Deputy Connolly and me, but including Mayo, Donegal and the midlands. A lot of money is not being spent well. The money should be put into the provision of a 24-hour air ambulance service in this country, not just for one section of it. I urge the Minister to examine the issue. I will support the Bill. Go raibh míle maith agat.

I thank Deputies for their varied contributions on this issue and a range of interconnected health matters as well. I assure them I take their contributions seriously.

I reassure the House that I am a fully supportive advocate for an Irish public health service, as are all individuals in this House. We have a public health service that needs more support and further investment, in particular after the very difficult years we have come through. I genuinely look forward to the work of the Oireachtas Committee on the Future of Healthcare in devising a ten-year strategy. To take up the point Deputy Fitzmaurice made about vested interests, the only way we will deal with vested interests in the health service is by saying that it does not matter who sits here as Minister for Health, this House is unified, regardless of the outcome of elections or party politics, in a certain direction of travel and therefore the vested interests cannot just wait out a Minister or a Government, they have to wait out all of us and that makes it an awful lot more difficult. I genuinely look forward to the committee reporting.

The publication of the HIA report is a reasonable and fair request from Deputy Kelleher. That will happen in the coming days and I hope it will then help inform the debate. It is important that we share the report and we will make it available as quickly as we possibly can.

One issue that was raised related to a percentage-based levy. The suggestion is that the current monetary approach has a disproportionate impact on consumers with cheaper plans. That is a legitimate point to raise. The scheme is approved by the European Commission on the basis that the key rationale for a risk equalisation scheme is to support the achievement of the principal objective of the Health Insurance Act, namely, to remove or reduce the incentive for insurers to target younger, healthier consumers at the expense of the less healthy or the less young. That is something to which we can all subscribe. The purpose of the risk equalisation scheme is not to support competition for the most price sensitive but to equalise the risk and to ensure intergenerational solidarity. People with lower level products do benefit because they get a higher rate of tax relief as the rate of tax relief is restricted to the first €1,000.

In relation to the levy, we have four levies and there are lower levies for non-advanced plans, which account for approximately 10% of the market. A percentage-based levy could have the inadvertent consequence of penalising older or sicker people who buy higher cost policies to provide the services they require. However, I take the point Deputy Kelleher made and I will reflect on it. Perhaps we could discuss it further.

On the waiting times for children with scoliosis, the Deputy is right to raise the matter which is an extremely important one. I have had significant engagement with parents and advocacy groups of children and adolescents with scoliosis. That is why, as part of the €40 million winter initiative funding, I have allocated the specific sum of €2 million for scoliosis patients. That will ensure 39 adolescents and an additional 15 to 20 paediatric patients with scoliosis are treated by the end of the year. We have more to do in this area but I am pleased to have this ring-fenced, targeted investment in scoliosis to address those who are waiting the longest for treatment in order that we can begin to deal with the waiting list.

I heard one or two Deputies sneer but they did not stay to hear my response to their comments. I felt it was a very fair comment to tell private health insurance companies not to use legislation passed by this House to protect older and sicker customers as an excuse to hike up the price. Let us be honest, every single cent of this stamp duty is going into a fund to support the market. It is going into a fund which supports risk equalisation and recognises that some insurance companies have a disproportionate amount of older and sicker patients and that they should not be discriminated against. Therefore, when people talk about passing on the cost of higher stamp duty levies I hope some politicians in this House and their media advocates will also talk about passing on the benefits of the higher credits in which this legislation will result. As I noted in my opening speech, the VHI statement welcomed that measure. Deputy Kelleher made the point that the VHI has approximately 53% of the market but it has about 67% of the claims because it has, historically and to this day, an older and often therefore sicker customer base. Let us be clear: this is not a levy to go into some sort of black hole, this is a levy to provide credits to insurance companies so that they can continue to provide cover for and not discriminate against older and sicker customers. That is an important point to make and one that might have been lost in some of the debate and commentary.

Deputy Connolly asked what I have done in terms of supporting the public health system since coming to office. The first thing I did was provide €500 million of additional funding on behalf of the taxpayer to stabilise the funding for the public health service. The second thing I did was deliver the largest ever health budget of €14.6 billion for the public health service in the history of the State, including the boom years on a like-for-like basis. Let me be clear: that is not to suggest it is a panacea or that there are not significant challenges. We are coming through a period in which there has been huge pent-up demand for investment, in particular capital investment in infrastructure. I have visited 24 hospitals in the past six months and I see a need for capital investment to upgrade infrastructure and to provide more space to deal with more patients coming through the door and to provide better working conditions for front-line health care professionals. I know that is an acute issue in Galway. I will visit Galway and do exactly what Deputy Connolly asked here this evening.

We have a capital review across Government next year and that is an opportunity to look at how we can add additional capital projects, not just in health but in a range of areas, but obviously I am particularly interested in health, to our capital programme. I will look at Galway in that context. When I visit Galway in the coming weeks I hope to have an opportunity to engage further with the health care professionals, hospital management and clinical directors on the issues Deputy Connolly raised.

I am aware of the discussion about Merlin Park Hospital but I will not give false assurances that I cannot back up with funding.

A number of issues arise with regard to Galway, one of which is the emergency department situation in terms of the physical capacity. The second issue is the medium to longer term project in regard to Galway on which I look forward to further engaging with the Deputy. I would make the point that we have a number of initiatives aimed at increasing capacity in Galway. Earlier this year we saw 30 new beds opened. In addition, there is a 75 bed ward block and an acute adult mental health unit under construction, both of which are expected to be operational in 2017. Furthermore, a Programme for a Partnership Government contains a commitment on a new emergency department at Galway University Hospital.

Also in regard to Galway, which falls within the community area of CH02, that area has received €5.5 million for additional home care as part of the €40 million additional winter funding I have provided. In addition, that area is also receiving €1.8 million specifically for University Hospital Galway, which provides six additional home care packages each week starting last month and going forward to February 2017. That will provide 114 additional home care packages associated with University Hospital Galway during that winter period.

I heard Deputies talk about the public hospital subsidising the private system. People need to make those comments in the context of initiatives that have taken place in recent years because since 2004 we have seen the new charging regime for private patients in public hospitals. Our insurers must now pay for all private patients in public hospitals. To give some figures on that, we have seen payments increase from €454 million between July 2013 to July 2014 to €650 million from July 2015 to July 2016.

With regard to risk equalisation, I want to be clear. I do not hold any candle for private health insurance companies here. The reason we are doing this, and I thank the many Deputies who acknowledged this, is to benefit individual consumers, not to protect individual insurers. This is a key consideration in the European Commission analysis. If we did not do this, how exposed would we be leaving some of our sickest and some of our most elderly citizens who access private health insurance? They are not here now but some of the Deputies wished to have an ideological debate about private health insurance, and that is their right, but we cannot close our eyes, put our hands over our ears and pretend that almost 50% of our citizens do not have private health insurance. This is a real issue for almost half of our citizens and some of those, particularly the oldest and the sickest, need us to pass this legislation to make sure that the now long-standing policy of risk equalisation and a community rated scheme can be provided, which would protect them from much higher premiums were we in a risk-rated free market type approach to this.

There should not be scare-mongering, misinformation or partial information regarding this matter. This is not the Government saying that the cost of health insurance policies must be increased by 10%. It might suit some people to try to present it as that. This is the Government taking the expert actuarial analysis of the Health Insurance Authority, HIA, in making sure we apply adequate credits to the insurance market through stamp duty so that we can continue to carry out a community rated system, a risk equalisation system and a system that supports older and sicker patients in particular. I welcome the fact that the VHI has acknowledged that this supports it in protecting that consumer base.

I look forward to this legislation progressing, and to further discussion on Committee Stage. I will revert to Deputy Fitzmaurice directly on the important issues he raised. I know the air ambulance is of particular concern to the Deputy. I thank Members for the debate.

Question put and agreed to.