Dáil Éireann Debate, Tuesday - 11 November 2014
99. Deputy Lucinda Creighton asked the Minister for Health the steps he is taking to address the fall-off of 300,000 Irish persons from the private health insurance scheme since 2008; his plans to examine the possibility of breaking up the VHI monopoly of the health insurance sector here; and if he will make a statement on the matter. [42786/14]
View answerFollowing a long period of rising premiums and a severe decline in health insurance numbers, the number of policy holders is now showing modest growth, with an increase of 1,000 in the number insured between July and September 2014. I recently announced a series of measures which I hope will contribute to a continuation of this trend. The Health Insurance (Amendment) Bill 2014, which I will bring before the House this Thursday, will provide the legislative basis for some of these measures, including:
- Risk equalisation credits (based on age, gender and level of cover) payable in respect of members aged 60 and over.
- The Hospital Bed Utilisation Credit which acts as a proxy for health status, is increased from €60 a night to €90 and is payable in respect of overnight stays for all ages. The combined impact of the Bed Utilisation and RE Credits brings the average net claims down to 130% of market average compared to 133% in 2014.
- Revised stamp duty rates of €80 for a child and €240 for an adult, which represent a 20% reduction in the levy for those aged 17 and under and a 17% reduction for those aged 18 and over, for products not providing advanced cover.
- No change to adult and child rates of stamp duty for advanced products (last year it increased by €49).
The Bill will also make provision for the introduction of young adult rates, to address the sudden increase in premiums that occurs for most young adults after age 21. In addition, Lifetime Community Rating regulations were signed in July and will come into effect from 1 May 2015, the aim of which is to encourage younger people to purchase private health insurance before age 35. Separately, I have decided to reduce the levy which insurers pay to meet the running costs of the Health Insurance Authority. A nominal rate of just 0.01% of insurers' premium income will apply for two years, resulting in savings for the insurance companies of €2m for each of these years. The rate will then be set at 0.9%, a 25% reduction on the current rate.
Taken together, all of these measures are designed to try to limit the need for increases in premiums, and make private health insurance affordable again for as many people as possible.
The VHI is one of four health insurers operating in a commercial insurance market. While it is the largest of the four, I do not consider that it holds a 'monopoly' position in the market but I am very conscious of the need for real competition and good consumer choice. I want to ensure a sustainable and competitive private health insurance market.
