Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 29 Nov 2007

Vol. 642 No. 5

Voluntary Health Insurance (Amendment) Bill 2007 [Seanad]: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Deputy Michael Kennedy was in possession with some minutes remaining. As he is not here, I call on Deputy James Reilly.

It is unusual to get such pregnant silences here.

As far as I understand it, the purpose of this Bill is to meet requirements coming from Europe to regulate the VHI to allow it engage in the activities it has been involved with before this, and SwiftCare and travel insurance in particular. There are many issues and concerns surrounding this.

It is quite clear we need competition in the insurance market because it brings the best service to people. Any doubt can be dealt with through the following example. The VHI has been controlling demand by limiting supply, meaning it has made it extremely difficult for people in the past to access various private facilities, particularly MRIs, CT scans etc. The advent of VIVAS into the market changed this, as they allowed direct referral from the GP. Before this, the patient had to be referred to a consultant to get an MRI, although the patient would have known the scan was needed following examination by the GP in the first place.

This was bunging up the system but BUPA followed the lead of VIVAS, and then the VHI followed suit. This freed up much of the consultants' time. For example, in the case of a knee injury it may be determined that there is no requirement for surgical intervention or MRI and the person can get on with treatment in the community through physiotherapy etc. That is one example.

If there is true competition in the market, where are the competitors? There is a small company called VIVAS and the company formerly known as BUPA. Where are the other big insurers we would expect to find in such a market, such as AXA, Friends First and Hibernian? They are involved in many other types of insurance. It is not a very competitive market, meaning it is not attractive.

The Bill addresses European issues but confers many additional powers on the VHI to get involved in financial affairs, fiscal packages, pensions etc. The net effect of what is happening is twofold. As a result of solvency rules from which the VHI has received a derogation, it does not have to keep the same funds in place as its competitors, such as VIVAS, Quinn Healthcare or anybody else coming into the market. There is no doubt that is a net financial advantage.

Current regulations in this country have a 40% figure with regard to solvency but the regulations in Europe have a 25% figure. Is it part of the Minister's plan that when she determines solvency, the rules will change retrospectively so the VHI could suddenly become solvent under the new regime? The 25% figure would relate to VHI but the Minister has hamstrung the new competitors in the market with the 40% level, despite them only being at a start-up stage.

Another issue is allowing the VHI enter other areas of activity. The VHI currently controls a large section of the travel insurance market. If people change their VHI health insurance, they automatically lose their VHI travel insurance, which is an anti-competitive practice. What parts of the Bill would protect people from such action?

In the past number of years we introduced legislation to stop banks from behaving in such a way and make it easier for a person to move bank accounts. I am sure the Minister will acknowledge this issue in the current Bill and take care to address it, as we are going backwards instead of forwards.

The VHI has 76% of its market but the big issue for many in the country has been risk equalisation or community rating. That functions to protect older people from rising premiums, particularly those who have historically been members of the VHI. They paid their share when young in keeping the premiums of the elderly down and they should not be discommoded.

The problem is the rate risk equalisation is set at. It was at 25% and the Minister has proposed to drop it to 20%. No other country has a rate of 20% and Australia, for example, has a rate of 3% or 4%. Leaving the matter aside, the VHI holds 76% of the market and is by far the dominant player, making profits of €70 million last year. Why does the company now need risk equalisation? An argument can be made that as its profits fall because of the growing age of the population then risk equalisation should come in. As its share of the market falls to the 40% level where it should be going, as the ESB has been instructed to do, risk equalisation should then arise. The two should meet half way rather than requiring those entering the market — many are choosing not to enter the market — being asked to pay up-front when the VHI has no issue with profitability at the moment.

The risk equalisation issue goes further than that. One company alone is due to pay €16 million to the VHI. What will that €16 million be used for? I would like to see it ring-fenced for health insurance. However, having spoken to accountants and others, I have ascertained that is virtually impossible because with all sorts of management fees, accounting activity etc. it could be used for anything. Will it use the €16 million from risk equalisation to compete in the primary care sector through VHI Swiftcare clinics or to promote its pensions or travel insurance? It is grossly unfair to everybody else in the marketplace. The VHI should be solvent before it is given any further powers or any greater level of activity.

A normal insurance market has little litigation. There is not that much activity between lawyers either here or in Europe. However, the amount of litigation going on here and in Europe involving BUPA, VIVAS and the VHI is staggering because the market is not level and it is perceived by the players involved — and those who will not enter it — as being grossly unfair. The Bill needs to correct that issue. Rather than being used as a smokescreen to allow it further powers at this time, it should be used to batten down the hatches. In the Seanad we tabled an amendment, which was accepted, requiring the VHI to report to the Competition Authority twice a year. It will be important to see what actions the Competition Authority will be able to take and what the company must report to the Competition Authority. The devil is in the detail.

Some 52% of the population subscribe to private health insurance which is extraordinary in a country that is supposed to have free hospital care. Why do people feel it is necessary? The answer is obvious. It is not that they have lost faith in the public hospital service. They have lost faith in their ability to access it. They believe that by having insurance they will be able to get timely efficient proper health care. They are concerned about Susie Long's seven-month wait and the wait of two years for a mammogram. During the week a lady in Cork got an appointment for 2010. Running our public health service in that manner is leading to people paying for insurance. We have a new phenomenon with some people with medical cards also having private health insurance because a family will club together to ensure that their grandparents or parents have access to speedy care. That is clearly bizarre and not right.

Part of the rationale behind the Bill was that the EU Internal Market Commissioner, Charlie McCreevy, wanted the Government to restructure the VHI. Has restructuring in the VHI that will pass muster with the EU Commissioner happened? Can the Minister confirm whether Commissioner McCreevy is now satisfied that the Bill is adequate, or does she expect that he will seek further and more immediate action from the Government on this matter? In other words must the VHI reach solvency and become authorised at an earlier date before it engages in wider activities?

The Bill raises questions about the level of reserve the VHI must have. I have already alluded to the 25% and 40%. I am concerned that having forced the newer players into the market with a 40% reserve the bar will drop. If the VHI is expected to reach a solvency level of 40% of its premium income by the end of 2008, I understand it will need to raise €140 million by the end of next year. How does the Minster expect the VHI to raise this level of income? Is the Government considering giving the VHI a cash injection or will the cost be passed on to the customer who has already seen VHI premiums rise by 25% in the past two years? The Bill proposes that the VHI be permitted to borrow in order to finance its solvency. Under the Third Non-Life Insurance Directive, insurance companies are permitted to borrow funds for the purposes of meeting solvency requirements, but subject to highly restrictive conditions on the extent and terms of such borrowings. Will the same criteria apply to the VHI or will it be allowed to borrow at a lower cost of capital that may give it a further advantage over its insurance rivals?

Under the revised legislation it is now proposed to establish a subsidiary services company into which all VHI staff and health services will be moved. This suggests that while the VHI will be subject to regulation, all staff will be put into a separated unregulated company. This would not be allowable for normal non-life insurance companies, which are not allowed outsource their entire business and must maintain a senior management team to control the business, a compliance officer, a senior claims handler etc. Can the Minister confirm if it is intended that the entire business will be outsourced to an unregulated company with all the attendant risk to staff? This services company will allow the VHI to apply economies of scale whereby the same staff work for all the different companies and businesses, allowing the staff in the services companies to do services for health insurance, travel insurance, pensions etc. This is not allowed under normal insurance standards.

Under the current legislation the relationship between the VHI and its subsidiaries is not clear. Will there be cross-subsidisation, to which I have already alluded and which would clearly introduce further uncompetitive practice into the marketplace? The Bill does not indicate whether these subsidiary companies will be for-profit companies or if they will only be required to break even. Will these companies be required to make a return to Government on any profits they make or will the profits be used to subsidise the core health insurance business to help maintain premiums at a lower level? That is a very important question. Many people would be happy to see a company like the VHI engaging in other activities if those activities were going to be profitable and ultimately feed back into the insurance company resulting in lower premiums for the client.

Should these subsidiaries face financial difficulties does the Minister expect that they will be capitalised by VHI or will they have the capability to borrow money in their own right? We need to know the status of those companies and whether they are profitable. There is no transparency. We have had considerable discussion about transparency and accountability recently. We need some transparency in this area also.

I have already alluded to the substantial risk equalisation payments the VHI will potentially receive. How will this money flow throughout the business? Will it be used to subsidise other non-profitable areas of activities in which it might care to experiment? The Bill does not specify whether subsidiary companies will be permitted to cross-sell and tie their products to the health insurance products. A customer who does not like the VHI health insurance offering cannot avail of travel insurance with it. If the company widens its remit to get involved in pensions and life insurance, will the Bill address the possibility that it could refuse to continue a customer's pension or life insurance? We need to think long and hard before empowering the VHI with all these additional powers before we address these problems.

Considering the VHI holds 76% of the health insurance market a contract with the VHI will be of critical importance to the survival of co-located hospitals. To date, six co-location facilities have been approved by the HSE with a further two locations awaiting approval. This is supposed to add 1,000 new private beds to the market. A couple of questions arise in that context. Have any of the co-located hospitals done deals with the VHI? If they have not and do not do so, it is extremely unlikely that they will survive. How does the Minister propose to finance the loss of insurance income to public hospitals which are currently paid by the VHI and other insurers when private patients occupy their beds? I have seen nothing in any budget that explains how these 1,000 beds will be funded. The Minister might tell us whether a single planning application has been lodged for any of these co-located hospitals. I understand that no such applications have been lodged. We all know how long the planning process takes in this country. How long will we have to wait until the new co-located hospitals are built? Will they ever be built?

I would like to raise another couple of issues. The publicly stated policy of the VHI has been that there is no need for any more private beds. Its annual report stated:

The single biggest challenge facing private healthcare in Ireland is the unprecedented increase in private hospital capacity which has been encouraged by generous tax relief for such investment. VHI Healthcare has questioned the wisdom of such tax incentives particularly since there does not appear to be any significant demand from the public sector to use these new facilities. The cost of financing the new capacity will place huge pressure on our objective to provide our members with quality healthcare at affordable prices.

That is a big issue when considering the co-located hospitals. My understanding is that the current batch of private hospitals would encounter some difficulty if patients were not directed to them by the National Treatment Purchase Fund. The undermining of our public hospitals, in tandem with the encouraging of private for-profit hospitals, is at the heart of the ideology I find objectionable.

I will repeat the point I made two nights ago — the old private hospitals were voluntary hospitals, often run by religious orders, rather than for-profit hospitals. The model of private hospital being proposed is entirely different. Such hospitals will be able to cherry-pick easy forms of treatment, such as elective surgery. As they will not have accident and emergency departments, they will not have staff on call 24 hours a day, or certain types of high-tech equipment, which would be needed if they had to deal with major road traffic accidents. All that stuff will be farmed out to our public hospitals, which will have to bear the strain. When patients have been stabilised and are no longer in too much danger, they will be transferred to these co-located hospitals which will be able to continue to make profits. It strikes me as poor value for taxpayers at every level. What will be the insurance rates for these co-located hospitals? It seems from what the VHI is saying that those rates will be in excess of the current rates. As the VHI admits that the cost of private health insurance will undoubtedly increase in such circumstances, it will become unaffordable for many people.

I also have concerns about data protection. Will the information collected by the VHI when it is selling health insurance be available to that company when it tries to sell life assurance? I find it highly improbable that some type of Chinese wall will be erected within the company. As the VHI will have access to the intimate health care information people have provided over the years, it will be able to use it to assess such people for life assurance and pension purposes. I ask the Minister to look long and hard at the many issues that need to be addressed. The VHI is a very important organisation that has played an enormous role in this country's health care provision. The Minister should put certain safeguards in place. She should insist that the VHI should come to the marketplace on a level playing pitch with everybody else and that its share of the market should decrease from 75% to 40% over the next five years. As it stands, this legislation does not include such safeguards, which gives it the potential to make matters much worse for Irish consumers.

The purpose of this Bill, which is essentially technical, is to oblige the board of the VHI to attain the level of reserves needed to achieve authorisation as an insurer. According to the explanatory memorandum, this legislation will give the VHI a structure that, among other things, will give it commercial freedom on products and pricing. The board members of this statutory corporation are appointed by the Minister for Health and Children. The VHI, which is regulated by the Health Insurance Authority, is the main provider of personal health insurance in Ireland, although a number of competitors have entered the health insurance market in recent years.

The VHI plays a key part in health funding in the State. The content of this Bill will not change these essential features of the VHI. As risk equalisation is essential, it has received cross-party support in the Oireachtas. We have been told that the changes being made in this Bill are necessary to ensure the continuation of risk equalisation. Regardless of the detail or contents of the Bill, what it is leading us towards is another matter entirely. It does nothing to remove the doubts about the future of VHI as a statutory corporation for which the Government has a clear and special responsibility. The Government has not made its position clear. Everyone in this House is aware of the penchant of this Government, especially the Minister for Health and Children, for the privatisation agenda, which may well give us reasons to be concerned.

The Irish Congress of Trade Unions' landmark study of our health care system, How Ireland Cares, states:

There is no necessary logical reason to link the risk equalisation decision with the ownership status of VHI. The authors advocate that VHI continue to be a state company so that it can continue to serve national rather than private or parochial interests. Whatever the future of VHI, it should not become a for-profit company

I note that a member of one of the Government parties, Senator Deirdre de Búrca of the Green Party, made a significant contribution to the debate on this Bill in the Seanad. She stated:

The Green Party broadly supports its thrust but we see the Bill as significant in that it may be the necessary precursor for the privatisation of the VHI. While the intentions of previous Governments in regard to the privatisation of the VHI have not been clear, we are aware the VHI board has indicated its preference for the privatisation of the company.

She went on to say the Bill could tilt the balance towards private medicine as opposed to the public system. She might have added that the intentions of the Government, of which her party is a member, are not clear either and this must be repeated today. However, she admitted that no reference is made to the future ownership of VHI in the current programme for Government. It seems from her contribution that the Green Party is against privatisation, at least in this specific instance.

It is interesting to read the response of the Minister for Health and Children when concerns were raised in the Seanad about the prospect of VHI privatisation. She made the following statement:

If one has private health insurance, one has preferential access to diagnostics and facilities paid for by the taxpayer and for which a group of employees in this State gets a fee.

This surely is an interesting contribution from the Minister for Health and Children. The Minister appeared to speak disapprovingly of this preferential access, yet she has done everything over a series of years to maintain the system that sustains that preferential access which is the two-tier system of which I and many Deputies have spoken about in this House on many occasions.

In 2005 the Minister said the fact that, "more and more people are getting private health care is a good thing. It's a sign of increasing disposable income." What the Minister did not say was that the increasing number of people taking out private health insurance is also a sign that people are moving away from the public health system because of long waiting lists and a steady deterioration in confidence in that system as operated by the HSE, the Department of Health and Children and with the accountable responsibility of this Government now in office in excess of a decade.

A vicious circle has been created. The public health system has been allowed to deteriorate and this prompts more people to go private. The for-profit health sector grows richer and this is indisputable. This Government is fattening this for-profit health care business as never before, most notably with the Minister, Deputy Harney's flagship project of private hospital co-location on public hospital sites.

Many uninsured people are also abandoning the public system and going into debt to pay for private care in order to avoid long waiting lists and to have their procedure performed at the earliest possible time to address their agony, their pain and their suffering or that of a loved one within their family.

In recent years, credit unions have reported growing numbers of people taking out loans to fund health care. Given the understanding of the market that credit unions primarily seek to serve, this is a sure indication of real failure in terms of the provision of a quality health care system available to every citizen on the basis of need. If credit unions have indicated that they loaned in excess of €30 million in 2004 to fund health care access, then this Government has truly failed the average citizen in this State. If that is the figure for 2004, I wonder what is the figure for 2005, 2006 and the current year. I warrant the figure has increased steadily in each of those years and it is imperative that the statistics be published and made publicly available.

We do not know the total amount of money expended on health services. We know the Government's commitment to health care delivery as part of the overall Exchequer spending but that is not the whole picture; far from it. We know that the best use is not being made of the public moneys because it is being applied inequitably and inefficiently in a two-tier system. Approximately 70% of the population pays for their health care twice, once through taxes and again through personal health insurance or direct-user fees for GP services, medicines and hospital care. People are paying twice and meanwhile the proportion of the population with medical cards is declining. This complex and inefficient funding system has been used by successive Governments to underpin the grossly inequitable two-tier public-private system.

The Government's fundamentally flawed policies and gross mismanagement of the health services has meant that increasing numbers of people have had to take out personal health insurance for themselves and their families. Many of these people are on relatively low or moderate incomes, do not qualify for the medical card and are concerned that if they rely totally on the public system they will face long waiting lists and poorer health care outcomes. They are paying on the double for health through tax and PRSI and through private health insurance. Many people fall between two stools and do not qualify for the medical card nor can they afford private health insurance.

Many of these people are getting into serious debt to pay for health care. I have stated before in the House that I have seen the anguish of young parents on low incomes with young children having to make the choice between some essential and the worry of bringing their child to the doctor. They do not have a medical card nor can they afford access to health care. They are in that limbo bracket in the centre, viewed by the continued annual review of the threshold for qualification for the medical card to be able to provide for their own health care needs from their own resources, but this is far from the truth. These people are suffering and they are forced to go without in order that their children have access to a local GP or whatever other referral is necessary. This is a disgraceful situation. I know of such cases and I have had to help in any way I can.

Sinn Féin has called for the establishment of a health funding commission. This is necessary for a proper assessment of all the money currently being spent on health services both by Government and by citizens directly in the form of health insurance premiums and user fees. Such a commission would not be engaged in a statistical exercise but rather its purpose would be to plan the transition to a truly fair and efficient system of health care funding, leading to the delivery of a quality public health care system.

It should be accessible to every man, woman and child on the basis of need alone and should not discriminate on the basis of the money in one's pocket or bank account or where one lives on this island. All citizens have that right. They are born equal and should be treated equally throughout their lifetime. This is the single fundamental common fact that all Members must face.

In Sinn Féin's strong view, the way forward is a universal, single-tier system of health care accessible to all based on need alone and regardless of income. Such a system would be funded from general taxation based on the principle of ability to pay. It would protect the most vulnerable and ensure there was no fast track to better care for some, while others languished on waiting lists. The best care should be available to all. There are very few winners in our current inequitable health care system. The exceptions are those who profit from the increasingly lucrative private health business. Overall, our population suffers an inequitable and inefficient system. This has been proven both repeatedly and in recent weeks and not only in the midlands. Its fundamental structure is flawed and it is plagued with bad political and bureaucratic management.

A new beginning is needed and health funding is central in this regard. No one accepts the proposition that because the Government is spending more than at any previous time, its commitment to quality health care delivery is clear and obvious. Nothing could be further from the truth. While more money is being pumped into the health system at present, the population dependent on it has also increased. Moreover, both the awareness of, and incidence of, need among our citizens are growing. A much wider debate on these issues is required than can be facilitated by the debate on this Bill regarding voluntary health insurance or by the Private Members' time accorded to the debate on the Labour Party motion of no confidence in the Minister for Health and Children, Deputy Mary Harney. Members require a substantive period to be allocated by the Government to address the realities of health care delivery in this State. The Government fears such a debate most and is not likely to accommodate it. However, I urge it to so do to address such matters in the round and holistically and to ensure the full facts are properly aired and exposed in this Chamber, as is appropriate.

I note the content of this Bill and await the Minister of State's response. I hope that were this Bill to proceed from Second Stage to further Stages, Members would have the opportunity to address some of the real concerns I have articulated. I refer in particular to the Government's intent and its absolute weddedness to a privatisation agenda in health care delivery. Shame on it for this and shame on those who voted last night to continue the writ of Deputy Mary Harney in health care in this State.

I thank the Deputies who have contributed to the debate and will respond briefly to some of the issues raised. A number of Members, including Deputy Tom Hayes, highlighted the benefits that competition can bring. The Government is committed to encouraging greater competition in the market and this Bill will help achieve that objective. Many of the recent reports on the market have highlighted the need to address VHI's legislative provisions.

The position of VHI must be regularised and this Bill provides for this at the earliest opportunity. Deputy Mitchell's support for the application of risk equalisation is welcome. As for the level of transfers that arise, I note that the risk equalisation scheme has never fully compensated VHI for the risk profile of its members as costs associated with higher level plans are capped. In addition, since April payments under the scheme have been reduced by a further 20% following the removal of the exemption for new entrants and Government consideration of the market reports. This is often overlooked as the scale of potential transfers attracts attention. However, the scale of transfers that arises under the scheme simply reflects, albeit not fully, the risk imbalances that exist in the insured populations.

The Minister is satisfied that the advantages, if any, that may have accrued from the derogation no longer apply and VHI's board was instructed to build its reserves to the required level in December 2005. In this regard and noting Deputy Terence Flanagan's comments on authorisation, the position at present is that the board is obliged to maintain reserves and does so to the extent that its reserves are well above the minimum EU requirement, notwithstanding the derogation granted to it under the first non-life directive. Moreover, the derogation can be seen as having hindered the development of VHI. In addition, one must take account of the extent to which the risk equalisation scheme as currently structured does not compensate VHI for its adverse risk profile.

It is important to bear in mind the relative risk profiles of the insurers when commenting on the proportion of the market held by VHI. Given its disproportionate share of the risk, particularly in the older age groups, and the level at which risk equalisation operates, VHI is not in a position to engage in predatory pricing strategy. Similarly, its market share cannot be compared to that held by large companies in other markets given the obligation to provide community-rated cover and to provide it on the basis of open enrolment and lifetime cover. In addition, the Health Insurance Authority is an independent body and is independent of the Minister in the performance of its functions.

A number of Deputies commented on the manner in which the VHI engages in the provision of ancillary services and of travel insurance in particular. The Minister has written to the VHI concerning this issue. VHI's management has engaged with the Financial Regulator on the manner in which it offers the product. The position is that VHI offers travel insurance as an intermediary, having been authorised by the Financial Regulator to so do. Members will also be aware that other insurers are offering special deals on the basis that more than one product is purchased. More generally, the Minister has asked the VHI to behave as if regulated in respect of compliance with the regulator's consumer protection code. As VHI moves to being an authorised insurer, this will become a statutory requirement.

Under the terms of the Bill it also will be the case that VHI will be obliged to form a number of subsidiaries to comply with the requirements for authorisation and to the extent that such subsidiaries would be subject to regulation by the Financial Regulator, they will be. They will also be stand-alone incorporated entities that do not pose a risk to the authorised health insurer. The regulator's requirements regarding freedom on pricing mean that any ministerial involvement in this area would not be permissible. The level of reserves required by the regulator has also been highlighted. While the Minister is of the view that the nature of health insurance and the manner in which it is provided supports the view that a lower solvency requirement should apply, it is a matter for the regulator to determine.

Deputy Neville referred specifically to VHI's failure to provide cover for psychotherapy. I have been advised by VHI that psychotherapy, when provided by a consultant psychiatrist who is appropriately registered with VHI Healthcare, is covered under both the outpatients' and inpatients' scheme. The level of cover depends on the plan held by the individual in question. I also understand that VHI is liaising with Deputy Neville on the issue of cover for psychotherapy as part of a multidisciplinary approach to the delivery of mental health treatment. As for the six-month limit for psychiatric services, it is the same for all hospital stays.

The Deputy also asked the reason psychiatric hospitals were not included in the recent National Hygiene Services Quality Review 2007 carried out by the Health Information Quality Authority, HIQA. Section 7 of the Health Act 2007 sets out the functions of HIQA. It provides that the authority will set standards on safety and quality regarding services provided by the Health Service Executive and service providers in accordance with the Health Acts — except for services under the Mental Health Acts 1945 to 2001, which are the responsibility of the Mental Health Commission — the Child Care Acts 1991 and 2001 and the Children Act 2001.

Deputy Jan O'Sullivan noted that consultants have been retained to provide advice on VHI being authorised by the end of 2008 and the scope of the provisions under section 3(d). VHI is being allowed to pursue a number of options regarding the acquisition of the necessary reserves to maximise flexibility. The consultants’ report will assist in the use of the appropriate means and, more generally, on requirements for the submission of a robust application to the regulator.

As for the possible introduction of universal health insurance, many studies have been carried out, both national and international, of different funding mechanisms for health systems and no one mechanism has stood out as the ideal mechanism to be adopted by all countries. All have their strengths and weaknesses. The model adopted in each country tends to be a reflection of its history and social structure.

Following an analysis of the most appropriate method of funding the health system, the 2001 health strategy concluded that no alternative system of funding would deliver significant improvements over the current tax-based method. The World Health Organisation commented in 2005 that no specific health financing mechanism is optimal and recommendable in all settings and that little advantage is discernible in one financing system over another in terms of impact on health outcomes, responsiveness to patients or efficiency.

Any new powers under the Bill do not arise until the authorisation has been achieved. The Minister has no function in regard to the level of reserves that the Financial Regulator would expect any applicant to hold. Many insurance companies have a structure that encompasses a services subsidiary. Any decision on VHI covering services is a matter for the VHI board. This is specifically recognised in section 2 of the 1996 Act. No decision has been taken to privatise the VHI. This Bill facilitates authorisation. The board has not said it is in favour of privatisation in any discussions it has had with the Minister. Since the establishment of the VHI in 1957 it has operated on the basis that it would provide cover for persons who also had public eligibility, thereby contributing to the delivery of acute care to the entire population.

No decision has been taken on the privatisation or break-up of VHI. I commend this Bill as a necessary development of the legislative provisions governing the VHI.

Question put and agreed to.