Health Insurance (Amendment) Bill 2020: Second Stage

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

I welcome the Minister of State, Deputy Feighan. He is recovering from his south Donegal constituents' disappointment on Sunday.

May I take this opportunity to congratulate you, a Leas-Chathaoirligh, and Cavan on a wonderful victory last Sunday?

I am pleased to have this opportunity to address the House on Second Stage of the Health Insurance (Amendment) Bill 2020. This is a short and technical Bill comprising six sections, all focused on the specific issue of health insurance. This legislation is needed in order to revise the parameters of the risk equalisation scheme, which is a financial mechanism that supports our community-rated health insurance market. It is widely acknowledged that the events of this year have been unprecedented and have affected us all in ways that we could never have imagined. Covid-19 has also had a significant impact on the private health insurance market, particularly the claims experience of insurers this year. This has caused much uncertainty regarding market direction in the year ahead, which is an important additional factor considered in setting the risk equalisation rates for 2021.

I will begin by briefly outlining the purpose of risk equalisation before providing an overview of the process undertaken to set the 2021 rates, and then outlining the specific revised rates that will apply next year. To give some private health insurance background, over 45% of the population in Ireland hold private health insurance. Health insurance in Ireland is provided according to four principles, namely, open enrolment, lifetime cover, minimum benefit and community rating. Our community-rated health insurance market means that the cost of health insurance is shared across all members of the market. In general, everyone, with certain exceptions, can buy the same policy at the same price. 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 healthcare pay more than they would in a risk-rated market.

Our market based on generational solidarity; younger and healthier people effectively subsidise older people who may be less well and need more care. This helps to keep health insurance affordable for older and sicker people, who might otherwise be priced out of the market.

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. Community rating is supported by providing cross-subsidies between insurers with different risk profiles. This is called risk equalisation and is essentially a financial transfer mechanism, whereby money flows from insurers with healthier members to insurers with sicker members. Without it, an insurer with older and sicker members would be required to charge much higher premiums than their competitors to cover their claims costs.

The risk equalisation scheme was first introduced in Ireland in 2013. Under the scheme, credits are paid to all insurers for their older and sicker members. These credits are funded directly by stamp duty levies on all health insurance contracts written, with all moneys held in the risk equalisation fund. In effect, the scheme redistributes funds between insurers to meet some of the additional costs of insuring older and sicker members. None of the stamp duties on health insurance contracts go to the Exchequer, they are all redistributed from the fund to compensate for the additional cost of insuring older and less healthy people. The risk equalisation fund is managed by the Health Insurance Authority, HIA, the independent regulator of the health insurance market.

Amending legislation is required each year to update the amounts of credits paid to insurers under the scheme and the amounts of stamp duty levied on health insurance contracts to fund the credits. As part of the process, the HIA carries out an annual analysis and evaluation of insurers' market data, focused on the claims costs that every insurer has paid over the preceding year. Based on this examination, the HIA determines the levels of credits to be paid out from the fund and the stamp duties applicable to every contract, for the following year.

This evaluation also includes information on market conditions, which are particularly relevant in the current pandemic. The Health Insurance Authority, HIA, consults each of the insurers during the process to ensure the evaluation is thorough and informed. Although the private health insurance, PHI, market has demonstrated resilience and remained reasonably stable among significant uncertainty in 2020, the longer term impact on market profile and membership is yet to be determined. In recommending stamp duty rates and credits to apply to the health insurance market for 2021, the authority had the added consideration that market claims for the first half of 2020 were distorted as a result of the pandemic.

This Bill seeks to amend the health insurance legislation to provide that the amount of stamp duty levy will remain unchanged in respect of non-advanced contracts, at €52 per child and €157 per adult, and for advanced contracts, at €150 per child and €449 per adult; that the level of hospital utilisation credit, HUC, will increase from €100 to €125 per night, payable for overnight stays in hospital, while the level of the HUC for day admissions remains at €75; and a marginal decrease in the risk equalisation credit payable in respect of those over 65 years. For next year, stamp duty rates which are charged on every health insurance policy will remain unchanged from the 2020 levels. In view of market uncertainty at this time, it is considered that sustainability of the market can be aided by keeping stamp duty unchanged in the period ahead. The hospital utilisation credit is a type of risk equalisation credit that is paid to an insurer each time a customer attends hospital for an overnight admission or day case. The credit acts as a proxy for health status as it is paid retrospectively and only when a customer needs treatment. Increasingly, the HUC for overnight stays is intended to improve the effectiveness of the risk equalisation scheme by compensating insurers for that increased risk in providing community-rated health insurance products.

Age-related credits are paid from the risk equalisation fund to insurers and are paid for customers aged over 65. These vary in amount, depending on age, gender and level of cover. This Bill provides for a marginal decrease in the amount of some of the age-related risk equalisation credits payable next year. While this means that insurers will receive lower credits for some older customers, this is balanced with the increase in the hospital utilisation credit, meaning they will receive more credits for the customers who are hospitalised during the year. The HIA has recommended the rates for 2021 and the Ministers for Health and Finance have considered and accepted those recommendations on the basis that these rates will provide stability and some certainty to the market in these unprecedented times. The amendments in this Bill are in line with the policy objective of the scheme to support community rating in the health insurance market so that older and less healthy people can access health insurance at the same price as younger and healthier people.

I will outline the specific sections of the Bill. Section 1 defines the principal Act as the Health Insurance Act 1994. Section 2 amends section 11C of the principal Act to provide 1 April 2021 as the effective date for revised credits payable from the risk equalisation fund. Section 3 amends Schedule 3 to the principal Act to the effect that from 1 April 2021 the applicable hospital utilisation credits payable from the risk equalisation fund in respect of insured persons are revised. Section 4 replaces Table 2 in Schedule 4 to the principal Act to the effect that from 1 April 2021 the applicable risk equalisation credits payable from the risk equalisation fund in respect of certain classes of insured persons are revised.

Section 5 amends section 125A of the Stamp Duties Consolidation Act 1999 to specify the applicable stamp duty rates for 1 January 2021 to 31 March 2021 and from 1 April 2021 onwards. Section 6 provides for the Short Title, commencement, collective citation and construction of the Bill.

To reiterate, the Bill allows us to maintain our support for the core principle of community rating which is a long-established and well-supported Government policy for the health insurance market. It is envisaged that the approach being taken now will provide stability for the private health insurance market in the year ahead. I commend the Bill to the House.

Fianna Fáil Senators will be supporting the Health Insurance (Amendment) Bill, which is akin to the Finance Bill or the Social Welfare Bill in that it arrives every November. As the Minister of State has outlined, the measures in it are designed to support risk equalisation and to sustain community rating in our health insurance market so that older citizens and people with illnesses can afford health insurance and are not discriminated against in favour of younger, healthier people. There is no increase in the risk equalisation levy this year.

Risk equalisation and community rating is something that we have always supported. Our values as a people are to support our older people and our sick, not just out of a sense of obligation but because we respect and value older people and the dignity of each person in his or her illness, medical condition or disability. We are very firm in our view that the principle of solidarity should apply in private health insurance as well as in public health services. Over 2 million people in Ireland have private health insurance cover and many have been paying for health insurance all of their adult lives. They have an entirely fair expectation that the health insurance market will not be permitted to change in a way that diminishes their coverage. It is entirely right for people to expect that they will not face higher health insurance prices because of their age or because they have a particular medical condition.

It is important to note the comments of Mr. Don Gallagher, the CEO of the Health Insurance Authority, HIA, earlier this year. He stated:

As yet, we are uncertain of the impact Covid-19 may have on the market. The combination of the health shock and economic shock as a result of Covid-19 could potentially result in people cancelling their health insurance for a variety of reasons in the short to medium term. A significant increase in cancellations at younger ages could potentially impact the sustainability and stability of a community-rated health insurance market. The Authority's primary objective is to ensure access to private health insurance for all consumers regardless of age, gender or health status. We have established a Board Committee to consider the impacts that the Covid-19 pandemic may have on the health insurance market and on the Risk Equalisation Fund.

In that context, it is important that we pay attention to the discussion around that and encourage those who have private health insurance cover at this time to maintain that cover if possible. Giving up such cover could have long-term consequences for them and for society at large.

I welcome the Minister of State back to the House. This legislation comes before the Houses annually.

I welcome the fact that we are not to see any increase in stamp duty, at least as it affects customers of health insurance companies. Health insurance has been an absolute blessing for hundreds of thousands of families over many years. By and large, the health insurance industry has served this country well in enabling access to high-quality healthcare for all people and all citizens who are in a position to afford health insurance. We are lucky that health insurance is reasonably affordable in this country, although not totally affordable. Community rating and risk equalisation are cornerstones in achieving equality in the area of health insurance. We in this country can stand over our health insurance system in a way in which those in the United States of America and other countries cannot. We ensure that vulnerable people with long-term illnesses, challenging conditions and lifelong disabilities are not ripped off when they purchase health insurance and have access to the same quality healthcare as everybody else. I welcome this legislation, which is a step in the right direction as it continues this long-held policy that has transcended governments.

With regard to health insurance in general, there is excessive red tape associated with it. There are myriad plans offered through different providers. These need to be streamlined, particularly for the benefit of older people. We have all had older people come to our offices who believed they were covered for certain procedures only to discover they were only partially covered or not covered at all. We need to eliminate small print and confusion with regard to health insurance. As a matter of fact, we need to do this across the spectrum of the insurance industry but we are talking about health insurance this evening.

The one type of insurance whose terms should be crystal clear, straightforward, uncomplicated and easy to understand is health insurance because it can be the difference between life and death. People buy health insurance so that they will have the comfort and the confidence that they will receive the care they require when they need it. That is the cornerstone of health insurance. We have to make that simple for people. We do not need it to be complicated because, when it is complicated, it leads to confusion and uncertainty and creates doubt, disturbance and upset at a critical time, when people are dealing with sickness, recovery and recuperation. Far too often, the red tape associated with health insurance and the confusion created by myriad options and plans leads people into situations in which they are uncomfortable and stressed when they should be recuperating. That is something the Minister of State might bring to the attention of the regulator so that something might, at some stage, be done about it.

I welcome the Minister of State, Deputy Feighan. It is safe to say that the fundamental purpose of this Bill can be summed up in one word, "fairness". As we know and accept, fairness is of great importance in any sector and certainly in the health sector. As others have said, the Oireachtas now passes legislation of this kind annually but it is very important nonetheless. It allows for health insurance at the same cost regardless of age, gender or one's health status or illness level. It ensures that health insurance companies are not penalised when providing insurance for older customers who may require medical treatment and care more so than younger customers. We cannot escape the fact that the provision of high-quality, appropriate and timely healthcare is expensive the world over. With increasingly high-tech procedures, revolutionary treatments and innovative medications, outcomes for patients are improving. Despite the constant focus on the negatives, this is as true for our health service as it is for those of many other comparable countries.

Covid-19 has also brought the exceptional care provided by the committed staff of our health service into sharp focus. For many older people or people with underlying health conditions, the possibility of contracting Covid-19 has been a constant worry. Often, despite significant investment by the State, the cost of healthcare is also a concern. The availability and accessibility of health insurance is therefore of great importance to many people. Like any other insurance, it provides peace of mind, hopefully without having to be used.

Last month the Joint Committee on Health heard from key people on the Sláintecare programme implementation office and the associated section of the HSE. It was clear that many wonderful and constructive initiatives and programmes are under way, each one representing a step towards the implementation of the all-party commitment to Sláintecare. The full implementation of Sláintecare will involve sensible and strategic investment. Primary care in the community, innovative use of technology and health promotion will all be prioritised. Health insurance may become a necessity of the past, with legislation like this no longer needed. That is the long-term aim of the Sláintecare report, which calls for free and equal access to healthcare for all. Until Sláintecare is fully implemented, this Bill is an important measure to equalise access to healthcare for some.

I have a timer so I can stay within my time. The Members will have to bear with me as I jump from page to page. I feel for the poor people who have to take note of my speeches.

The Minister of State said in his speech that more than 45% of the Irish population holds private health insurance. In light of Senator Kyne's point, I find this an interesting figure. For the last five years or longer we have been talking about implementing Sláintecare. Millions of euros have been invested and countless hours have been given over to discussions of Sláintecare in this House, the Dáil, the Joint Committee on Health and all sorts of other political spaces. It seems a little bit strange that we are perpetuating a two-tier health system that is split between public and private when we should be assessing what will happen to the private healthcare sector during the era of Sláintecare. I certainly look forward to that era, when we will have an NHS-style healthcare system here in Ireland. We need to have a conversation about the future of private healthcare. I am aware that I have gone a little off-piste, but I think that is an important point.

I would like to draw attention to something that may be a side issue but is related to today's discussion. I refer to non-community rated international student health insurance. I do not know if the Minister of State has been contacted by the Alliance for Affordable Insurance for International Students. This is a quite large alliance of representative bodies including the Irish Council for International Students, ICOS, the Higher Education Colleges Association, the Union of Students in Ireland and several universities. It campaigns for the continued availability of non-community rated student medical insurance for international students studying in Ireland. This follows a decision of the Health Insurance Authority, HIA, that non-EEA students studying in Ireland on courses of more than one academic year are to be considered ordinarily resident in Ireland for the purposes of the Health Insurance Acts. A recent Court of Appeal ruling confirmed the HIA position on applying community-rated medical insurance to international students in Ireland.

Ireland is the destination of choice for many international students seeking to begin or further their higher education in an English-speaking country. We cannot really afford to lose international students due to a sudden lack of cost-effective and tailored cover for medical expenses. For context, I note that since this happened the cost of international students' insurance has gone from about €150 per year to €690 per year. That is a 450% increase. This happened after 20 years during which international student insurance was relatively stable. This has been raised with the Government in the last 20 months.

It has also been raised in this House and I have tabled an amendment to this Bill that will address this issue for international students. As I said, it has been raised in this House a couple of times and I hope the Minister of State will see fit to fix the anomaly that is causing an enormous amount of stress for international students. I need not, as I say every week, refer to the great work that our healthcare workers are doing in Ireland, and those international medical students are very important to us, both in terms of our international reputation and the fact that they are healthcare workers on the front line.

We will be supporting this Bill and I hope the Government will support my amendment. We have talked today about fairness and stabilisation and I put it up to House to ensure that our international students are treated with the same respect. I am sure I will get to talk further about the amendment when we come to it.

Before I begin to deal with this Bill, I must take this opportunity to congratulate the Leas-Chathaoirleach on Cavan's magnificent achievement at the weekend.

I know that the Minister of State is a major sports fan and he will be cognisant of the three major sporting achievements this weekend, namely, Cavan's magnificent victory in Ulster, Tipperary's historic win in Munster and, of course, Tottenham Hotspur, the original London Irish club, moving to the top of the Premiership. It was a fantastic weekend.

In terms of this Bill, it is fair to say that the political differences across this House are most acute when we debate issues such as private healthcare and private health insurance. The political differences between this Government and Sinn Féin are most visible when it comes to health care provision, particularly in the context of private versus public healthcare. When this Bill came across my desk, I was reminded of the body of work progressive politicians have ahead of them to address the imbalance in healthcare and the importance of removing private healthcare from our public hospitals and our public healthcare system.

As has been stated previously, the question of health insurance is very fraught. On the one hand it facilitates the skipping of queues and the bypassing of waiting lists created by this and previous Governments. On the other hand, it represents a large number of people who go without other things to have health insurance because they are afraid that, without it, they will end up waiting 24 months for a colonoscopy or some other procedure.

I fundamentally oppose the need for a private health insurance market. We should be addressing this issue today. Why is there a need for a private health insurance market? The industry exists within the crevices and cracks of our broken public health system. I do not blame the health insurance industry for how it operates. As is the case in other countries, it is exploiting a failed system. If health insurance companies want to provide access to private care in private hospitals, I wish them well. That is their prerogative. My anger is reserved for those who have broken our health system and allowed private medicine to exist within it. It is clear that the system did not break because of those working within it. The system was deliberately broken and the process began with the Fianna Fáil-Progressive Democrats Government.

Why did this happen? The system was broken to allow private medicine to make a profit from people's ills while convincing them that this was a good thing and possibly even good for their health. The health insurance market exists because the Government champions it and because people are afraid of having to enter the public system where they will have to wait for months or even years for treatment. Indeed, this weekend I spoke to two neighbours, one of whom is in his second year of waiting for a pain-killing injection, with no hope. Ironically, he is a former HSE worker. We are where we are because successive governments have driven, as a matter of policy, the privatisation of aspects of the health service and the commodification of health itself. We must ask whether this is the best way to run a health service. Is the manner of health insurance in this country fair, especially in view of the fact that much of the cover on offer is driven by fear? It constitutes an extra burden to be carried by taxpayers who have already contributed a large amount to the health budget.

The Oireachtas deals with a Bill such as this one every year. It seeks to take the risk away from insurance companies and equalise the risk for certain policyholders. It would be great if the Government was as quick to intervene in the market in other areas. While we will allow the passage of this Bill to ensure that older people and others are protected, we do so with serious reservations about a health service that is buckling under the weight of demand. In addition, we must point out that fear and a health service crippled by mismanagement and ineptitude are driving people to take out private health insurance. This is the case because successive Governments have failed to provide universal health care which is free at the point of delivery and which is based on need rather than an ability to pay.

Insurance companies trade fear for profit in the health market and unfortunately there are many in this House who continue to act as their cheerleaders. The commodification of healthcare has been one of the most damning elements of the neo-liberal privatisation agenda. The push to turn people's health and well-being into a revenue stream is morally wrong. Where a public system sees illness and patients in need, the private sector sees money and opportunity.

Sinn Féin will allow this Bill to pass but we must have a more robust debate on the issue of private health insurance and private healthcare in our public system. I look forward to the day when we can provide a health service that delivers for the people based on need rather than on ability to pay and where private health insurance is no longer needed because of the quality of such a universal health service.

Finally, I wish to echo the point made by the previous speaker. The issue of non-EEA students has been around for a while. It was raised last year. It would not be a costly measure to accept a progressive amendment on Committee Stage and I hope the Minister of State will consider that because it is very important.

I now call on the Minister of State to make his concluding remarks.

I thank Senators for their support for the Bill and for their contributions to the debate.

Health insurance is held by a very large proportion of people in Ireland relative to other countries. As Senator Hoey pointed out, 45% of the population is quite large by European standards. Community rating is a fundamental cornerstone of the Irish health insurance system. This means people who are old or sick do not have to pay more than the young and healthy, whereas in other health insurance systems the level of risk that an individual presents directly affects the premium paid. This objective is supported by a risk equalisation scheme which aims to keep health insurance affordable for older and less healthy citizens. Under this scheme, all the money raised in levies from insurers is paid into a fund for the sole purpose of supporting the market in the form of credits payable.

To recap, the purpose of this Bill is to specify the revised credits and corresponding stamp duty levies to apply on health insurance policies from April 2021. Against the background of some uncertainty about the impact of Covid-19 on the health insurance industry, the credits and levy rates for next year strike a fair balance between the need to support community rating while maintaining sustainability of the market at a time of uncertainty. This Bill allows us to maintain our support for the core principle of community rating, which is long-established and well-supported Government policy for the health insurance market. The Bill will ensure that we can continue to provide the necessary support to ensure that the costs of health insurance are shared across the insured population.

In reply to Senators Hoey and Gavan regarding health insurance for non-EEA students, I am not sure whether it is appropriate to deal with it in this Bill which only applies to risk equalisation. I will ask departmental officials to discuss the matter with the Senators to see if we can sort it out. I understand that it concerns non-EEA students studying in Ireland and hopefully the officials will find a way to resolve that. I will set up a meeting in the coming days to try to sort it out.

I thank Senators for their contributions and hope that we can pass this very necessary Bill in the coming days.

Question put and agreed to.

When is it proposed to take Committee Stage?

On Thursday, 26 November 2020.

Is that agreed? Agreed.

Committee Stage ordered for Thursday, 26 November 2020.
Sitting suspended at 5.09 p.m. and resumed at 5.45 p.m.