The Deputy appears to be suggesting that the increase in Stamp Duty proposed in the Health Insurance (Amendment) Bill 2013 will lead to an increase in policy charges, which in turn will mean that a portion of some policies will no longer qualify for tax relief, because of the restriction in tax relief on health insurance policies which I announced in Budget 2014. The Stamp Duty is part of the permanent scheme of risk equalisation, which commenced in 2012 and followed the previous interim scheme of risk equalisation introduced by the previous Government. Both schemes give effect to the policy of community rating of health insurance, which was a policy common to both this and the previous Government.
The increased Stamp Duty rates, if agreed by the Oireachtas, will apply from 1 March 2014. The Stamp Duty is charged on the health insurance company rather than the individual policy holder. It does not automatically follow that any or all of the increased Stamp Duty charge will be passed onto the policy holder, although there is nothing to prevent the company doing so. The Deputy will be aware that my colleague, the Minister for Health, has called on insurance companies not to pass on all the cost of the increased Stamp Duty. Also, the Stamp Duty has not increased on “non-advanced cover” policies, broadly speaking, those policies which provide cover for public hospitals only.
A variety of factors will influence the insurance companies pricing strategy for health insurance policies, not only the income tax relief changes announced in the Budget and the Stamp Duty changes announced by the Minister for Health. The tax changes may not be the most significant factor affecting the price of health insurance policies. It is therefore not possible to estimate how, whether and to what extent the tax changes will impact on individual policies.
I would like to point out to the Deputy that there is no question of any policy holder no longer qualifying for tax relief on the premium. The Budget change imposed ceilings on the relief which will, be available in future.
