Vol. 571 No. 1
801 Mr. O'Connor asked the Minister for Health and Children if his attention has been drawn to the concerns of Age Action in respect of the increase in VHI premiums; his contacts in the matter; and if he will make a statement on the matter. [19602/03]
Representations have been received in my Department on behalf of Age Action concerning increases in VHI premiums. The position is that the setting of premiums is the responsibility of the VHI board. The legislation requires the board to set premiums at a level sufficient to cover costs and make proper allowance for reserves. The board is however, obliged to notify the Minister of the day in advance of putting proposed increases into effect. The Minister may prevent the introduction of an increase, but must have good reasons for doing so.
Having given the VHI's submission on its recent increase careful consideration I was satisfied that the board's decision was in accordance with its legal duty in setting premiums. The additional income yielded by this increase shall be spent in meeting claims costs. It will enable the VHI to provide the level of services required by its subscribers, including older subscribers, whose propensity to claim is higher than other groups. Experience nationally and internationally is that health insurance costs rise considerably in excess of the level of annual inflation, driven by higher prices in the health sector and increased incidence of claims which arise due to a range of factors including ageing of the population, medical and technological advances, and heightened consumer expectations. Our community-rated system of health insurance ensures that premiums for older persons are significantly lower than they would be under a risk rated system.
