I am pleased to have this opportunity to address this Committee on the Health Insurance (Amendment) Bill 2018. The Bill was published on 14 November and concluded its passage through Second Stage in the Dáil last week. I welcome the support received in that House for the core principle of community rating, which is long established and well supported Government policy for the health insurance market.
I thank the Chairman, Deputy Harty, and Deputy Durkan for their support on this legislation.
This is a short and technical Bill comprising eight sections all focused on the specific issue of health insurance. The amendments outlined in the Bill will ensure the ongoing sustainability of the private health insurance market and seek to keep health insurance policies at an affordable price for all citizens, young or old, sick or healthy.
Legislation is needed 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 independent market regulator, the Health Insurance Authority, HIA, carries out an annual evaluation of the market, focused on the claims costs that every insurer has paid over the year. Based on that analysis, the authority recommends the level of credits that should apply the next year.
The rates for next year, recommended by the authority, have been considered and accepted by the Minister for Health. This year’s Bill will provide for a general decrease in the credits across genders and age groups, and there will be no change in the stamp duty levy on contracts. Maintaining the stamp duty levies at existing levels should ensure that health insurers do not increase premiums and that contracts remain at an affordable price for all citizens.
In addition to the technical amendments, this year’s Bill provides for a number of amendments to the Acts governing the Health Insurance Authority and VHI.
In short, it is proposed to expand the membership of the Health Insurance Authority board; to broaden the composition of the VHI board; and to enable VHI to sell international healthcare plans directly. I will outline each of these proposed changes in turn.
The Health Insurance Authority was established in 2001 with provision for five board members to be appointed. Since then, the health insurance market has become more complex, with insurers adopting innovative marketing and product propositions to expand their client base and improve their risk profile.
Further significant changes can be expected as the Sláintecare programme is implemented. The role of private health insurance in our health system could change significantly, and the regulator must be able to react to this changing role and to advise the Minister for Health appropriately.
For the objective and effective discharge of its functions, it is desirable that the authority includes a broad mix of skills and experience and expanding the membership of the board will ensure they can deliver its strategy and address any challenges it meets.
The Bill also contains two amendments to the Voluntary Health Insurance Acts, which are the governing legislation for VHI.
The first VHI-related amendment deals with board composition. Currently, the VHI board is restricted to having only two persons who are “health service providers” on the board. This amendment will remove this restriction and includes a new provision that the Minister will give due consideration to the mix of skills present on the VHI board when making appointments, thus ensuring the highest standards of governance.
The second amendment to the Voluntary Health Insurance Acts deals with one specific area of VHI’s business activities. The amendment will permit VHI to sell international healthcare plans directly, not only as an agent as it is allowed to do currently, and it will remove the requirement for VHI to seek ministerial approval before selling these plans. This development is consistent with VHI’s current status as an insurer authorised by the Central Bank. VHI is competing in a highly competitive and regulated marketplace and this amendment will remove the impediment to VHI’s ability to compete with its competitors and thereby allow VHI to avail of potentially significant business opportunities.
The 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, and the amendments to the legislation governing the Health Insurance Authority and VHI are to allow these organisations to plan for future developments in this ever-changing and complex environment.
I commend this Bill to members.