Health Insurance (Amendment) Bill 2014: Report and Final Stages

Amendment No. 1 is in the name of Deputy Kelleher.

I move amendment No. 1:

In page 4, between lines 33 and 34, to insert the following:

“(a) by the insertion of a new subsection after subsection (1):

“(2) Any insured person who has paid a relevant increase over a continuous period of 10 years shall have their age of entry adjusted to 35 years if they continue to remain insured.”,”.

This has been discussed on Committee Stage. My amendment proposes an acknowledgement that a person would not be penalised for taking out lifetime community rating. The Minister agreed to consider this amendment. He said this could be achieved by regulation but we have concerns about the particular aspect. The Minister said he would give me his response on Report Stage.

I concur with Deputy Kelleher and I record my support for the amendment. On Committee Stage I indicated that not only was I happy to acknowledge but I fully understood the common sense of the proposition. I believe that a lifetime penalty for someone joining a private insurance arrangement after the age of 35 is punitive. The amendment seeks after a period of ten years to remove the penalty aspect and to take the calculation as of membership having been taken out by the age of 35. In my view a ten-year penalty is reasonable and fair. A ten-year penalty is more than adequate and appropriate, as the case may be. For someone who is 36, 37 or 38 years of age to have to bear a penalty up to their final days by comparison with somebody who joined at 33 or 34 years of age, does not ring true with me. I believe that timeframing it to a period certainly no greater than ten years, as Deputy Kelleher's amendment suggests, is both fair and reasonable.

Section 3 of the Bill amends section 7A of the Act and refers to the premia which may be charged under health insurance contracts in certain circumstances. This section clarifies that the obligation on insurers to impose lifetime community rating loadings on premiums is mandatory and cannot be waived by an insurer.

While Section 7A of the Act sets out the circumstances under which increased premiums may be charged, this section also clearly provides that any requirement to pay increased premiums is subject to regulations under subsection (6). In this context, the Health Insurance Act 1994 (Determination of Relevant Increase under Section 7A And Provision of Information under Section 7B) Regulations 2014, were signed into law on 7 July 2014. These regulations provide for premium loadings to be applied to inpatient indemnity health insurance contracts purchased on and from 1 May 2015 and require registered undertakings to set different premium prices depending on the age at which an individual takes out health insurance.

As premium loadings are provided by way of regulation rather than by primary legislation, it is appropriate that any policy change requiring an amendment should be made to the regulation which governs the operation of the scheme.

The amendment proposed by the Deputy will therefore be considered as part of the review of the scheme provided for in the regulations to be carried out by the Health Insurance Authority after April 2017, when the scheme has been in operation for a period of time. While I agree in principle with what the Deputy proposes, it is not necessary now and will not be necessary for at least ten years and it may never be necessary because I hope that within the next ten years we will have universal health cover. It is not necessary at all that it be put into primary legislation because it can be done by regulation. For those three reasons I am not accepting the amendment.

We were possibly going to agree until the Minister mentioned universal health insurance and this sparked my thought process again. I can accept the rationale of some of what the Minister has said but there is a view that what we and the Minister are trying to do is to stimulate the insurance market, incentivise younger people to take out insurance for the purpose of cross-subsidising those who are in greater need of the support of health services.

Even those ideologically opposed to private health insurance believe that because it exists there must be intergenerational solidarity. While we are trying to incentivise it, this will really discourage people if the loading will be with them for life. The legislation should include a clause that the penalty would wither after a certain period of time. The Minister stated the Health Insurance Authority, HIA, will assess this and make recommendations. The previous Minister for Health rejected many of the recommendations made by the HIA. While it is a statutory body charged with overseeing the private health insurance market, its recommendations can be rejected, as has happened previously. This is not much comfort with regard to ensuring a mandatory obligation for the penalty to wither after a certain period of time.

I do not know whether the regulations governing people who come to the country have been brought to the Minister's attention. They have a window of nine months during which they must register with an insurance company, and if they leave they must inform it. There is a perception that those aged 35 and over will skip in and out of the country to avoid health insurance weighting. This may have been brought to the attention of the Department, but if it has not it should be examined. It is very onerous and will cause huge administrative work. The idea people would leave the country for a certain period of time to avoid this weighting does not stack up. People will leave the country for many reasons, such as economic necessity or because they want to go on holidays or live abroad, but the idea one would leave for the purpose of avoiding the levy is completely unnecessary and will cause many administrative difficulties for the insurance companies which, as the Minister well knows, will create further red tape. Administration means higher premia for ordinary people.

In his reply the Minister spoke about no urgency of address, and suggested we have up to ten years at least to address the substantive argument in Deputy Kelleher's amendment. This is not the case. People are not prepared to buy a pig in a poke. I am no advocate for private health insurance, as I have made very clear time after time, and nor am I a supporter of universal health insurance. I am an advocate for universal health care. I have no doubt in my mind that a 36 year old, on the basis of what the Minister said, would decide he or she was being asked to buy a pig in a poke. The penalty will apply. It is not much good saying we will examine it in two years time, in 2017, and at some point in time along the years subsequently. It will be a disincentive, and of this there is no doubt in my mind, for those who are well past their 35th year and even for those close to that age bracket. Clarity is required and certainty is the only assurance. The methodology suggested by Deputy Kelleher is, to my mind, the only one that stands the test. There it is; I recognise the Bill is a requirement and I will support it. I am not an advocate but I understand this is the reality in which we are, and so I support the thrust of what the Minister seeks to achieve. This amendment is worthy of serious consideration and for all the right reasons, which are to be clear to potential new insurance purchasers and not to be a disincentive, as I believe the current arrangement provided in the Bill most certainly will be.

What I am trying to achieve here is something which is straightforward, clear, understandable and simple. The more exceptions, subclauses and scenarios one tries to legislate for, the less clear it is. The message will be very clear, which is we are encouraging people to take out a health insurance policy if they do not already have one, and a loading will apply if they do not do so by 1 May next year and are over 35. If too many guillotines, exceptions and subclauses are introduced, we get away from this very clear message.

If this is something we need to tweak or amend over time this can be done, which is why the two year review is built into the legislation, but even at that point it will be done by regulation. It would not be practical to come back to the Oireachtas every time the scheme needed to be amended in some way. I appreciate the sentiment of the Members opposite but I do not agree with their solution.

With regard to people coming from abroad, I do not believe people will leave the country to game the health insurance system or anything of the sort. This is not my view at all. What is the case is anyone coming from abroad after 1 May will have the same grace period to take out private health insurance as anyone who lives in Ireland on or before 1 May.

Amendment put and declared lost.
Bill received for final consideration and passed.

The Bill will now be sent to the Seanad.