Dáil Éireann Debate, Tuesday - 5 November 2013
245. Deputy Róisín Shortall asked the Minister for Finance his estimate of the number of policies and persons affected by the tax changes announced in budget 2014 in relation to tax relief on medical insurance if there was an across the board 10% rise in health insurance premiums in 2014. [47109/13]
View answerI am advised by the Revenue Commissioners that based on 2012 data, the most up to date data available, it is estimated that up to 577,000 policy holders, which provide cover for 1.1 million individuals, may be affected by this measure. The Revenue estimate is based on an analysis carried out on the annual returns and the gross premium prices (i.e. before tax relief at source is applied) submitted by the Health Insurers in respect of the 2012 tax year. However, it should be noted that many will only be affected marginally, depending on the cost of the policies that individuals purchase.
The issue of pricing of insurance premiums is a matter for insurers. However, Revenue has further advised that if a 10% increase in health insurance premiums was applied to these figures it would result in some 653,000 policy holders, which equates to just fewer than 60% of all policies, and just under 1.3 million individuals, being affected by the measure.
However, this estimate assumes no behavioural changes on the part of claimants, and a 10% increase in health insurance premiums may have a significant behavioural impact and may not produce the nominal impact indicated. For example, individuals can opt for less expensive policies and therefore reduce the impact of the Budget measure or avoid it entirely.
