I move that the Bill be now read a Second Time. In recent years this country, like many others, has been more and more concerned with the provision under legislation of health services of a variety of kinds for individuals. The steps taken in this direction have in the past led to much controversy and discussion. We have not followed the example of our nearest neighbour in providing a comprehensive State-aided health scheme for all citizens irrespective of means. We have, however, travelled some distance along that road in providing a fairly comprehensive measure of free or partially free health services for a substantial section of the population. It is, however, implicit in the steps already taken under our health legislation that many citizens whose need may be as great have not in fact been provided for. Present health services do not, generally speaking, confer any benefits of free or partially free services on those whose income exceeds £600 yearly or on farmers whose valuations are over £50. There is, therefore, an appreciable section of the population who under present circumstances must themselves bear the full cost of health services. The number of such persons has been estimated very roughly at 170,000. Adding their dependents, this category of the community might total between 400,000 and 500,000 persons in all.
It will be appreciated that expenses arising from the treatment of ill-health have increased steeply in recent years. The cost of medicines, appliances, dressings and so forth has advanced and modern developments in medical and surgical techniques require the use of more costly equipment and more elaborate investigation and treatment than they did ten or 20 years ago. Indeed it is probable that these expenses will advance further as time goes on. The picture, therefore, so far as it concerns those above the limit of £600 yearly income, or £50 valuation in the case of farmers, is that these people may find themselves at very heavy, even crippling, expense should illness requiring hospitalisation or extensive surgical or medical treatment befall them or members of their families. No one could regard with complacency a continuation of this state of affairs and it is desirable that some way be found to help such people to meet such heavy and unforeseeable expenses. One way of doing this would, of course, be to provide substantially extended health services of the kind already available under present legislation. This would mean the provision of a comprehensive scheme of State medicine with all that such a scheme implies. I and my colleagues in the Government are convinced that that would not be the best way to meet this problem. We feel that it would be far better to find some way by which those on whom these heavy costs fall could meet such costs themselves without having to be dependent upon the State or upon health authorities to assist them in doing so.
It has appeared to me that some scheme organised after the pattern of voluntary health insurance schemes operating extensively and successfully in other countries might meet our circumstances here and, in order to establish whether we in this country might proceed on similar lines, I set up in January, 1955, a widely representative Body to advise me in the matter. I asked this Body to advise on the feasibility of introducing a scheme of voluntary insurance which would enable citizens to insure themselves and their dependents against the cost of hospital, surgical, specialist and other treatments and against the cost of medical or surgical appliances. I asked the Body also, if they considered that such a scheme would be possible, to recommend the type of organisation best suited to operate it; the minimum benefits which should be provided under various headings; the contributions which would need to be made by the persons in the scheme and to advise me on some other points— such as the methods of collecting contributions from the participants.
The Advisory Body reported to me that they considered that it would be feasible to introduce a scheme of voluntary insurance against the cost of hospital maintenance, surgical and medical services and maternity. They also felt that certain medical and surgical appliances could be included on stated conditions and that the cost of drugs and medicines could also be covered in a scheme, again on certain conditions. The Body considered that the best type of organisation to administer a scheme would be a non-profit making company, specially established for the purpose, and with a Government guarantee at the commencement at least. It was also considered that the Body should be exempt from the obligations regarding share capital, etc., imposed under insurance law. The remaining recommendations of the Body mentioned the premium which it was felt would be necessary for a minimum scheme and dealt with some other less important matters. The Body were unanimous in their views, except in one matter to which I will refer later.
Since I received the report to which I have referred, I have given detailed consideration to this whole question of making a scheme available on the lines recommended, and I have decided to adopt the principle of entrusting the business of voluntary health insurance to a non-profit making body. I feel that if this were done we should take the line that there should be a scheme which would help people to protect themselves against the major unforeseeable expenses of ill-health, and that while the promoters of the scheme should be required to operate it economically and without making a profit, the contributors or subscribers should, for their part, carry the full cost themselves and that they should not expect to be subsidised directly or aided financially by the State.
I feel that as a matter of ordinary prudent management the heads of families and others joining it should be expected to put aside out of income the subscriptions or premiums necessary to obtain the desired cover. Making advance arrangements to help oneself to pay the unforseeable heavy costs of illness is a form of prudent provision very much like taking out life or fire insurance—and nobody looks to the State or to anybody else to pay his premiums for that kind of insurance, or to contribute towards them. I have every hope that it will be possible to work out a fairly comprehensive scheme, the cost of which should not be excessive. Moreover, a valuable concession was introduced under a recent Budget whereby an appreciable abatement of income-tax is available in respect of premiums payable under a scheme of this kind.
The aim of such an insurance scheme is to help people to help themselves. This idea of self-reliance is fundamental and unless the proposal is received on this understanding it cannot operate successfully. The cost of our present services has been such as to tax the resources both of central and local funds and the time has surely come when further expansion must be along the lines of making it easier for participants to fend for themselves. I hope that it will be possible to create a worthwhile public opinion behind this idea of voluntary health insurance, a public opinion expressive of the determination of our people to preserve their natural dignity as individuals and at the same time to make prudent provision for the hazards of ill-health.
The object of the Bill now before the House is, therefore, to create machinery under which a satisfactory scheme of voluntary health insurance can be provided for everybody who wishes to participate in it. It is proposed under the Bill to establish a Board called the Voluntary Health Insurance Board for the purpose of carrying out schemes of voluntary health insurance. Power is reserved in the Bill to the Minister for Health to specify the medical, surgical, hospital and other health benefits to be afforded in a particular scheme to be operated by the Board, but the Board will have the power also to carry out such other schemes as they think fit— subject to the consent of the Minister in regard to the scope and extent of the benefits, and with the approval of the Minister to amend any scheme which they may introduce. There is a provision in the Bill that the charges payable by subscribers must be fixed at a level which is sufficient, but only sufficient taking one year with another, to allow the Board to carry on their business, due provision being made for the payment of outgoings properly chargeable to the Board's revenue. The effect of this will be that the Board on the one hand cannot make a profit, and on the other that it must fix its charges at such a level that it cannot incur a continuing loss.
The financial provisions in Sections 16 and 17 of the Bill do not, of course, mean that the Board is going to be subsidised in the ordinary sense of the term; under the first of these sections the Board may be given a loan from the Exchequer not exceeding £25,000 to be used in setting themselves up in business and in meeting their expenses until subscriptions commence to come in. This loan must be repaid under such terms and conditions as the Minister for Health, with the consent of the Minister for Finance, may lay down. There is a provision in Section 17 for the loan to the Board of a further sum of £25,000 towards meeting the Board's losses during the first five years of operation of the scheme or schemes of voluntary health insurance, and here also the Board must pay back this loan on such terms and conditions as the Minister for Health with the consent of the Minister for Finance may lay down. The reason underlying the provision of a loan to meet losses will be obvious. The Board will be starting without financial resources and without exact experience of the nature of claims which they may encounter. If that claims experience should prove to be adverse in the initial years, the Board having no reserves at that stage must have the means to meet their claims until such time as the situation has been adjusted.
The Bill also contains a number of normal provisions designed to secure that information on the activities of the Board will be available to the public. For example, they will be required to keep any accounts which the Minister for Health may direct them to maintain; to have their accounts audited annually by an auditor appointed with my consent; to send a copy of the auditor's report to the Minister and five copies of their certified balance sheet and income and expenditure account and to publish those documents and place them on sale. These documents must, moreover, be laid before each House and the Board will have to publish an annual report of its proceedings, which will be laid on the table of each House of the Oireachtas. Finally, the Minister for Health is given power to require the Board at any time to submit any information which he may seek on its activities, and to direct them to include in their annual report information on any particular aspect of their activities as he may specify. This machinery will secure that, broadly speaking, the Board's activities will be subject, not alone to the Minister's scrutiny but to the scrutiny of both Houses of the Oireachtas and the public.
There is one type of benefit to which I would like to refer specifically, namely, cover in respect of the cost of normal maternity. The Advisory Body were of opinion that it would be feasible to include cover against the cost of normal maternity—but only if such cover were subsidised to the extent of rather more than half of what it would actually cost. They estimated that to obtain a cash benefit of £20 for normal maternity each adult subscriber would have to pay for that particular benefit alone a premium of £1 15s.: and the Advisory Body felt that of this sum the State should contribute £1 per adult contributor. To enable the premium to be fixed at £1 15s. for maternity it would be necessary for all adults in the scheme to take out maternity cover—which means, of course, that those who could never encounter the cost of maternity —for example, single persons, and married subscribers who were past child-bearing age—would have to pay for it. Many of these would object to being made pay for maternity cover either on the grounds that they could derive no benefit from their payment of subscriptions, or on the grounds that they were paying for other people's maternity costs, or on both grounds. If we are to accept the Advisory Body's figures the amount of benefit for maternity would have to be small for a fairly high premium in respect of that particular benefit.
It can be argued, moreover, that maternity is not really an insurable risk—and, in fact, two of the members of the Advisory Body put forward this view in a reservation to the Body's report. Finally, since the Advisory Body's report was submitted I have had before me the views of a number of organisations representative of a large number of the potential customers for a scheme of voluntary health insurance. Their opinions differed somewhat on the question of inclusion or non-inclusion of maternity benefit in a scheme, but in general these organisations seemed to feel that the ordinary prudent bread-winner could himself budget for his maternity costs without recourse to an insurance arrangement. They felt that these costs were in a different category from those of unexpected illness or surgical emergency, against which there is frequently no opportunity to prepare. Some of these organisations did indicate that they would not be adverse to a subsidy for maternity if a 100 per cent. subsidy were offered. I could not agree to this. The desirable basis of voluntary health insurance is that the scheme introduced should offer protection against the major unforeseeable expenses of ill-health, that the public in general should utilise it if they so wish, that the premium or subscription should be at as reasonably low level as possible, and that its whole cost should be met by the subscribers themselves without help from any other source. It is claimed that for normal maternity in particular there is a strong argument against subsidising the cost since this is a contingency which does not arise without warning and for which there is reasonably adequate time to prepare.
I do not propose under this Bill to debar the Board from including maternity benefit in any scheme which they may carry out subject to ministerial consent, but for the reasons mentioned there is no provision in the Bill under which this or any other type of benefit can be subsidised. It will be for the Board to determine, subject to my consent, whether a maternity benefit will be included in the policy, or policies, it offers to the public and in the light of actual experience gained by the Board this whole question may be reconsidered after some time has elapsed.
Since the drafting of the measure was put in hands it has become apparent to me that an extension of the terms of the Bill in one respect will be needed. I think it will be necessary to provide, by way of an amendment which I will move at a later stage, that the Board to be established will more or less have a clear field in operating voluntary health insurance business here.
At one time following the report of the Advisory Body it appeared that no existing insurance body was prepared to engage on this type of insurance and accordingly the need for any restriction was not obvious. I now fear, however, that a need for some such restriction does exist.
I indicated that the estimated number of potential subscribers might be in the region of 400,000 to 500,000 persons, including dependents, but the actual number of persons likely to join a scheme, particularly at its inception and making due allowance for the lack of knowledge and experience of our people—especially in the rural areas— of this class of insurance, can be expected to be very much less. The market for this business in this country will, therefore, be fairly small for some time and I do not think there is room for more than one organisation to conduct it successfully. Moreover, if a scheme of voluntary health insurance is commenced it would be most desirable in the public interest that the public should have the guarantee of its continuing to operate. There can be no such guarantee if, for example, a commercial organisation were the only one in this field. Such an organisation could retire from this particular business at any moment, and, in fact, we have seen this happen within the last couple of years with a commercial company which operated a scheme. Another important consideraction which has impelled me to the conclusion that, broadly speaking, the Board to be established should be the only one to be authorised to conduct this business is that, if the general need in this matter is to be met satisfactorily, it is desirable that whatever organisation is to conduct it should be required at all times to provide reasonably extensive cover. This, again, would be impossible to achieve unless the Body entrusted with the responsibility for the conduct of the business is required to work on fairly well defined lines—which could not be applied under the normal free commercial system.
Finally, the profit element must be considered; I think that it would be inappropriate to have a commercial organisation earning a profit for itself on business of this kind by the exploitation of what is undoubtedly a national need. I think most of the House will agree with me when I say this, that this very important type of health insurance should not be a profit-making one. For this reason, therefore, I propose to introduce an amendment later on which, broadly speaking, will provide that the new Board will have a clear field in operating health insurance business.
I do not intend to put out of business a number of small organisations already in the field but I want to indicate clearly at this stage, in the consideration of the Bill, that I do propose to seek power not to allow any firm or organisation to continue to enter into voluntary health insurance business to an extent which might prejudice the chance of success of the new organisation by offering schemes designed, possibly, to capture the cream of the limited market available leaving only the less profitable business to the new body. There are a number of organisations providing limited cover against the cost of ill-health at the moment and there will be as little interference as possible with these. Examples of these would be Trade Unions supplying health benefits, Friendly Societies, certain professional vocational organisations, and so forth. The amendment which I will introduce will probably take the form of prohibiting the conduct of voluntary health insurance by any body except the Board, save under licence, and licences will be limited to those who are at present working in such a restricted field that they cannot be regarded as competing seriously with the Board.
The details of schemes which may be introduced, and their cost to the customer, are matters which will have to be worked out when the proposed Board has been established. As was mentioned in the report of the Advisory Body it is very difficult to calculate, in the absence of actual claims experience, the appropriate contribution for any scheme of voluntary health insurance, and the first couple of years' experience of a scheme or schemes must be experimental.
For the reasons which I have given, the Government consider that the Bill is necessary in order to establish a scheme under which a substantial section of the public will be enabled to protect themselves against the costs of ill-health, and I recommend it to the House for a Second Reading.