In 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. The Minister for Finance has allowed 20% tax relief on policies up to €1000 gross for adults and €500 for children.
It is 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.
The Health (Amendment) Act 2013 provided for new charges for all private in-patients in public hospitals, which will take effect on 1 January 2014. It is estimated that the rates included in the legislation will raise €560 million in hospital income in 2014 from private patients, which is additional hospital income of approximately €39 million over revenue in 2012.
My Department will continue to oversee the maintenance of a competitive and sustainable private health insurance market, under the provisions of the Health Insurance Acts 1994 to 2012, and to monitor developments on an ongoing basis, to ensure that the market is regulated appropriately in the transition to a market-based Universal Health Insurance system.