The total percentage increase in VHI premiums for its core products, since 1997 is estimated to be 96%. In calculating the income that would arise from the recently announced increase in the cost of private beds in public hospitals, my officials estimated that it would result in an increase of about 5% in health insurance premiums.
In the interests of equity, it is Government policy to gradually eliminate the effective subsidy for private stays in public hospital beds and relieve the taxpayer of the burden of carrying these costs. Even with this increase, the cost of providing services to private patients in the major hospitals will continue to exceed the income arising from the charges.
Notwithstanding this increase, and the phased implementation of moving towards economic pricing of public pay beds, the cost of community rated private health insurance remains low by international standards and continues to benefit from tax relief at the standard rate. In addition, the regulatory framework provides that premiums for children under the age of 18 and students in full-time education up to the age of 23 may not exceed 50% of the adult rate.
