Simon Coveney
Question:12 Mr. Coveney asked the Tánaiste and Minister for Health and Children her views on risk equalisation and whether it is necessary in the private health insurance industry here. [26199/04]
View answerThursday, 28 October 2004
Questions (15, 16)
Olivia Mitchell
Question:16 Ms O. Mitchell asked the Tánaiste and Minister for Health and Children if the Health Insurance Authority has made its final recommendations on risk equalisation; and her views on this issue. [26198/04]
View answerWritten answers
I propose to take Questions Nos. 12 and 16 together.
By way of introduction to this reply, I would point out that provision for risk equalisation is a necessary support to maintain the established common good principles of community rating, open enrolment and lifetime cover in our voluntary health insurance market, and has been the policy of successive Governments. The need for recourse to risk equalisation in a community rated market is recognised in the EU's third non-life insurance directive.
Under the Health Insurance Acts and the provisions of the risk equalisation scheme 2003, the Health Insurance Authority has a central and independent role to play in relation to whether or not risk equalisation transfers between insurers are warranted. Participating insurers submit data returns to the authority on a six monthly basis, and the authority analyses these returns to assess the level of risk differential between the insurers. The risk equalisation scheme provides that: risk equalisation transfers cannot be commenced where the difference in the risk profiles of the insurers is less than 2% of the market equalisation percentage; risk equalisation transfers can only be commenced with a positive recommendation from the authority where the percentage is between 2% and 10%; and the Minister is obliged to consult with the authority on a decision to commence risk equalisation where the percentage is greater that 10%. The authority's first report, submitted at the end of April 2004, did not recommend the commencement of transfers, the then market equalisation percentage being 3.7%.
The authority's second report in respect of the period January to June 2004 was submitted to my office last night and is being considered. The scheme provides that the authority may, if it thinks fit, release such reports to insurers, subject to the release not being effected earlier than 14 days from the date on which the said report was received by me.