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Health Insurance Prices

Dáil Éireann Debate, Wednesday - 13 November 2013

Wednesday, 13 November 2013

Questions (40)

Billy Kelleher

Question:

40. Deputy Billy Kelleher asked the Minister for Health the measures he will put in place to support the health insurance market; and if he will make a statement on the matter. [48048/13]

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Written answers

My Department oversees the maintenance of a competitive and sustainable private health insurance market, under the provisions of the Health Insurance Acts 1994 to 2012, and monitors developments on an ongoing basis, to ensure that the market is regulated appropriately in the transition to a market-based Universal Health Insurance system. There are a number of separate measures currently underway to ensure sustainability of the market, which include cost control initiatives, revised Risk Equalisation Credits to protect community-rated health insurance for all and the ongoing consideration of appropriate regulatory measures necessary to support the market.

With regard to health insurance costs, 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. I want all insurers to address the base cost of their claims and to see all procedures provided in an appropriate, safe, healthcare setting. Work on this review process is progressing well and I expect to receive an initial report from the Chair very shortly.

I am committed to progressively increasing the extent to which risk equalisation compensates for the costs of insuring older customers. A permanent Risk Equalisation Scheme (RES) was introduced with effect from 1 January, 2013. Prior to the introduction of the permanent RES, an Interim Scheme of Age-Related Tax Credits and Community Rating Levy had been in operation from 2009 to 2012. Yesterday I received Government approval to the immediate publication of the Health Insurance (Amendment) Bill 2013, which sets out revised risk equalisation credits and the corresponding stamp duties that will apply under the Risk Equalisation Scheme from 1 March 2014. Different risk equalisation credits will apply to 'advanced' and 'non-advanced' health insurance policies. There will be no change to the stamp duty payable on lower cost 'non-advanced' health insurance, which will help to ensure that the option of lower cost health insurance remains available. The stamp duty for health insurance products providing 'advanced' cover will increase from €350 to €399 per adult and from €120 to €135 per child. This will help direct support, in the form of higher risk equalisation credits, where it is needed most and will subsidise health insurance for the most vulnerable patients. Under the Health Insurance Acts, I set the rates for risk equalisation credits and the Minister for Finance sets the rate of stamp duty require to fund those credits.

The decreasing membership of the health insurance market, in addition to the adoption of industry-wide strategies, represents a significant challenge to the long term continuation of community rating and sustainability of the market. In particular, the proliferation of plans available on the market and the increasing segmentation of the market due to strategies adopted by the commercial providers is of growing concern to me. I am open to considering any practical measures or initiatives which help to maintain affordability, and provide greater clarity, for consumers seeking to purchase health insurance. I intend to address this further in the New Year in order to simplify things for the consumer and will consider the regulatory measures necessary to ensure a smooth transition from the current system of a voluntary private health insurance market to a Universal Health Insurance system.

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