As a result of the implementation of the Health Act, 1953, and the removal of difficulties in the way of its operation in the past two years a fairly comprehensive measure of free or partially free health services is now provided for a substantial number of persons. It can be estimated that about five-sixths of the population are eligible for services under present legislation. This large section of the community is provided with free or partially free services on the assumption that they are unable to meet in part or in full their own health costs.
There remains, however, a substantial section of the community who at the moment must bear the full cost of their health services. This section probably numbers some 500,000 persons including wives, children and other dependents, and they comprise a group of our citizens whose yearly means exceeds £600 or, if farmers, whose valuation is over £50. Should illness requiring hospitalisation or extensive surgical or medical treatment befall such persons they may well be faced with heavy if not crippling expenses, difficult if not impossible to meet from income. Indeed their problem in this respect tends to increase in difficulty with the rising costs of hospitalisation, medicines and of medical treatment generally. It is clear that in these circumstances some means must be found to avoid or mitigate the inevitable financial hardship caused to these citizens as a result of serious illness.
It can be urged that the simplest way to meet this problem would be to extend the benefits of the Health Act to this section of the population. No great difficulty would be entailed in solving the problem in this way—a simple amendment of the Health Act would be sufficient to extend its scope to the entire population. The simplicity, however, of such a procedure is not, in my opinion, an argument in its favour. The adoption of the example offered to us by Britain where State medicine is in operation would in my opinion be a poor tribute to our ability in this country to solve our health problems by means more in accordance with our national traditions.
I believe that those citizens whom I have mentioned are people who would themselves wish to stand on their own feet and would desire to meet the costs of any illness they may encounter from their own resources. The vast bulk of them are persons accustomed and anxious to meet their various liabilities and in the habit of making provision for the various financial contingencies they are likely to meet. The average citizen balances his budget by foresight and good management and he has to lay out his income in such a way that he is enabled, not alone to meet his day-to-day expenses, but also to make reasonable provision for the future.
These commendable feelings of personal self-respect are not to be ignored and I do not believe that such persons would expect to have their natural obligation to look after the health of themselves and their families financed by the State or would wish to have no personal responsibility henceforth for the medical treatment and care of themselves and their families. In my considered opinion it would be contrary to our ideals and tradition that the State should in this manner supplant individual effort unless there are grounds for believing that the individual cannot himself meet his responsibility.
As matters stand, we in this country have not had at our disposal the means for making provision beforehand for meeting the expenses of ill-health in ourselves or our dependents. In many other countries this problem has been met successfully through schemes of voluntary health insurance and in order to establish how far we might proceed on similar lines I set up in January 1955 a widely representative body to advise me in the matter. I received the report of this Advisory Body in May 1956 and as Senators will recall I made copies of this report available to members of each House of the Oireachtas.
The Advisory Body in their excellently documented report stated that it would be feasible to introduce a scheme of voluntary health insurance in this country against the costs of hospital maintenance, surgical and medical services, and maternity. Amongst their other recommendations was one that the best type of organisation to administer such a scheme would be a non-profit-making company especially established for the purpose, exempt from the provisions of the Insurance Acts and with a Government guarantee at the commencement at least. The report was unanimous except in one respect to which I will refer later.
The Government has accepted the recommendation of the Advisory Body in regard to the type of organisation necessary to implement this scheme of voluntary health insurance and this Bill is designed to give practical effect to this recommendation. It is obvious that as this Bill is a Bill designed to create the necessary machinery it must be read in the light of the purpose it is designed to achieve. I have heard criticism to the effect that the Bill does not contain details of the benefits health insurance will offer, nor of the premiums likely to be charged. Any Senator who appreciates the background to this Bill will understand that it should be considered in the light of the Advisory Body's report and that it should be regarded as a Bill designed broadly to bring about a scheme of insurance providing benefits regarded by the Advisory Body as being desirable.
The Bill establishes a board to be known as the Voluntary Health Insurance Board whose functions will be to make and carry out schemes of voluntary health insurance. The board will in fact be required to carry out one particular scheme which the Minister will specify and will have in addition power to carry out such other schemes as they think fit subject to the sanction of the Minister in regard to the scope and extent of the benefits. The board will be required to conduct its business on a non-profit-making basis. This is secured by the provision in the Bill that the subscriptions payable must be determined in such a way as to balance incomings and out-goings, taking one year with another.
In order to enable the board to set themselves up in business and to meet their expenses until subscriptions commence to come in the Bill provides that the board may be given a loan from the Exchequer not exceeding £25,000 to be repaid on such terms and conditions as the Minister for Health, with the consent of the Minister for Finance, may determine. Provision is also made for a further sum not exceeding £25,000 which may be lent to the board to meet losses during the first five years of its operation. The board may not have to draw on this later loan but it is obviously necessary to make provision against possible losses. The Advisory Body in their report drew attention to the difficulties of estimating in advance the cost of benefits under the voluntary health insurance scheme and pointed out that practical experience is the only way of testing the adequacy of the premiums in relation to the benefits. In the event of a loss in the initial years the board must have the means to meet claims until such time as they can adjust the situation.
It is the normal practice when setting up statutory bodies of this kind to require them to make information on their activities available to the public. It is particularly important in the case of the Voluntary Health Insurance Board that that practice should be followed because of the interest which subscribers to the scheme will have in the value they are getting for their subscriptions. It is provided, therefore, in the Bill that the board must keep any accounts which the Minister for Health may direct them to maintain, and that they must send a copy of the auditor's report together with copies of their certified balance sheet and income and expenditure account to the Minister. These documents must be published and placed on sale and laid by the Minister before each House of the Oireachtas. Moreover, the board is required to furnish an annual report on its proceedings to the Minister who will cause it to be tabled.
The Advisory Body in their report estimated that a premium of the order of £1 15s. for each adult in the scheme would be necessary to provide a lump sum benefit of £20 for normal maternity. They considered that a substantial increase by this amount on the adult premium of about £4 estimated to be required to cover all other benefits under the scheme would discourage prospective members from joining the scheme. They suggested, therefore, that the State should make available a subsidy of £1 towards the estimated amount of £1 15s. leaving 15/- to be met by each adult subscriber. On this basis they took the view that it would be feasible to include cover against the cost of normal maternity. Two members of the Advisory Body dissented from this view in a reservation to this report.
While I agree that it would be most desirable to include a maternity benefit in a scheme of this kind I could not agree at this stage that the State should subsidise, even partly, such a benefit. I would in addition be concerned at the possible unfavourable consequences of loading the premium in respect of a benefit which many subscribers could not avail of. In the reservation to the report on this particular matter, the point was made that it is undesirable that any unnecessary obstacle should be placed in the way of persons who wish to join a health insurance scheme and that such a scheme should not contain provisions likely to discourage single persons and married persons beyond the child-bearing age from joining. The obstacle could be removed by subsidising the maternity premium in full, but since the idea of self-reliance is fundamental in this proposal that course does not commend itself to me at present. Moreover, a number of organisations representative of a large number of potential customers for the scheme have indicated to me since the report of the Advisory Body was published that they feel the ordinary prudent head of a family could himself budget for his maternity costs without recourse to an insurance arrangement.
However, this particular aspect is a difficult one upon which to form a clear judgment and the views which I have expressed here may have to be altered in the light of actual experience. The board will not be debarred from including maternity benefit in any scheme they carry out and it is my intention to consider this matter further in the light of such advice as the board may extend to me gathered from the actual experience which they will acquire from their initial operations.
I mentioned earlier that there are some 500,000 potential subscribers to a scheme including dependents, in the higher income group not eligible for services under the Health Act. I should like to make it clear at this point that it is not the purpose to design a scheme of voluntary health insurance solely for this group. I have every hope that numbers of persons eligible for the Health Act services at present will decide to cover their health risks by insurance when a scheme becomes available. It is noteworthy that the membership of the voluntary health insurance organisations in Great Britain has increased very substantially since the introduction there of the National Health Service. However, the actual number of persons likely to join a scheme at the beginning can be expected to be far less than the 500,000 mentioned.
There is little experience of this class of insurance in this country so far, particularly among the farming community which accounts for about 120,000 persons in the higher income group. One must expect that the market for this business here will be fairly small for some time and I do not think that there is room for more than one organisation to conduct it successfully. I consider it essential, furthermore, that voluntary health insurance should be developed in this country on a national basis and that the State should have some voice in its administration so as to ensure that the needs of the public are adequately met.
The public must have some assurance, too, of the continuity or permanency of any arrangement which is set up. Another important consideration is that this business which has the object of meeting what is undoubtedly a national need should be conducted on a non-profit-making basis. For these reasons, I am proposing in the Bill to give the board a virtual monopoly of health insurance business. This is done by requiring organisations wishing to carry on this business to obtain a licence from the Minister for Health. It is not intended to interfere with organisations offering, or intending to offer, health insurance to a limited membership or with a limited scale of benefits: generally speaking, organisations of this kind—trade unions, friendly societies and so on—are exempted under the Bill from the licensing requirements. It is intended, however, to prohibit any firm or organisation from continuing or entering into voluntary health insurance business to an extent which might prejudice the chance of success of the new board.
This Bill as I have indicated, is an enabling measure. Its importance is that it represents a new approach to a problem unsolved up to the present— the problem of those who are ineligible for benefits under existing health legislation. The idea of self-reliance is fundamental to it. Its eventual aim is to help people to help themselves. I am confident that most of those for whose protection the Bill is designed will welcome that principle of self-reliance. I trust that this House will accept the Bill as an endeavour to solve the important outstanding health problems and I commend it to the House for Second Reading.