Dáil Éireann Debate, Tuesday - 5 November 2013
1194. Deputy Billy Kelleher asked the Minister for Health if, in view of the increased rise in health insurance costs arising from budget 2014, he will set out the steps he proposes to take to reduce the cost of health insurance; if he will reduce the health levy; and if he will make a statement on the matter. [46774/13]
View answerIn Budget 2014, the Minister for Finance announced a cap on tax relief on premia for private health insurance, whereby tax relief for medical insurance premiums will be restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings will no longer qualify for tax relief. It is also important to note that the measure is projected to save the Exchequer €94m in 2014 and €127m in a full year. Pricing of insurance premiums is a matter for insurers. In terms of potential increases in premia that might arise from this measure, it is up to each insurer to contain its own costs and to compete actively on the basis of price.
With regard to health insurance costs generally, I have consistently emphasised the vital need to address the rising cost of private health insurance and the necessity for all private health insurers to address their cost base aggressively. Last year, I established the Consultative Forum on Health Insurance to generate ideas to address health insurance costs. In June of this year, I appointed an independent Chairperson, Mr. Pat McLoughlin, who will work with my Department and the insurers on a review process to give effect to real cost reductions in the private health insurance market. Work on this review process is progressing well and I expect to receive an initial report from the Chair very shortly.
Each year, at my request, the Health Insurance Authority (HIA) prepares the Report of The Health Insurance Authority to the Minister for Health, in accordance with Section 7E (1)(b) of the Health Insurance Acts, 1994 – 2012. The Authority submitted its most recent report to me in October 2013. This Report sets out the HIA’s evaluation and analysis of information returns supplied by insurers, their analysis of market issues and, arising from their expert analysis, the Authority's recommendations for Risk Equalisation Credits and associated Stamp Duty to apply for the following year. I am currently considering the recommendations from the HIA in respect of the rates of risk equalisation credits and stamp duty to apply from 1 March 2014. In the interim, it is important to note that this stamp duty, or health levy as referred to by the Deputy, collected from health insurers is in respect of the number of lives insured by them and is not placed on individual policy holders. The money collected is used to fund tax credits for older people with private health insurance who, if under a risk rated model of insurance, would be charged a higher premium for health insurance than younger people, given their higher risk profile. Funding the tax credit for older people ensures that everybody is charged the same premium for a particular health insurance plan, irrespective of age, gender and the current or likely future state of their health.
It is a matter for the insurance companies as to the extent, if any, they pass the stamp duty on to their customers. The Government remains committed to keeping down the cost of health insurance, so that it is affordable for as many people as possible, as part of measures to ensure the sustainability of the private health insurance market in the transition to Universal Health Insurance.
