I wish to outline the Health (Alteration of Criteria for Eligibility) (No. 2) Bill 2013 to the Members of Seanad Éireann, and I look forward to hearing the views of the Senators in the course of the Second Stage debate. The Bill amends the Health Act 1970, as amended, principally section 45A and section 48A, to take account of the changes to the eligibility criteria for medical cards for persons aged 70 years and over, as announced in budget 2014.
The 2014 financial provision for the health services is €13.66 billion, including €397 million in capital expenditure. This provision also includes savings measures amounting to €666 million. This is some €360 million less than was provided in 2013, and represents a 3% reduction in funding. As a result, 2014 will be the most challenging year the health services have yet had to face. I assure the House, however, that maintaining safe, quality health services will be as much a priority for the Government in 2014 as it has been in 2013, despite the need for significant and difficult financial savings. It has been, and most assuredly continues to be, our intention that front-line health services would be protected to the greatest extent possible, and I have made clear that providing safe, quality services in a timely fashion is my top priority.
We continue to build on the ongoing measures to achieve savings through efficiencies and reorganisation under the public service agreement, to curtail the growing cost of pharmaceuticals, and to increase income generation. None the less, the level of savings required means the Government has had to make some very difficult decisions and all of us, personally, and as public representatives, are well aware of the vast impact of these difficult decisions forced upon us. The Government continues to ensure we reduce the cost of services while maintaining safe services to ensure the most vulnerable are protected.
The General Medical Services, GMS, scheme, is one of the areas identified in budget 2014 for required savings. As the Senators are aware, the GMS scheme comprises general practitioner, GP, services and prescription drugs, as well as some other services provided to holders of medical cards or GP-visit cards. Over recent years there has been a significant expansion in the GMS scheme. The GMS costs in the region of €2 billion per year, and several steps are being taken to reduce this cost. At the end of October 2013, approximately 1.99 million people qualified under the GMS. Medical cards make up most of this number, amounting to 1.86 million or more than 93% of the total. At the end of 2005, there were 1.16 million medical cardholders. Since then has been an increase of more than 60% in the number of medical cards, amounting to 700,000 individuals. In excess of 40% of the population now holds a medical card, compared with just 27% at the end of 2005. Medical cards for persons aged 70 years and over account for approximately 350,000 individuals, or approximately 19% of all medical cards. The total cost of the GMS provided to over-70s medical card holders is approximately €750 million per year, which represents more than one third of the total cost of the GMS scheme.
Under the Health Act 2008, special eligibility rules applying to persons aged over 70 years were put in place which are more generous than those applying to the standard means-tested medical cards. It is estimated that there are approximately 379,000 people aged over 70 years in the State. Given that there are approximately 350,000 medical cards issued to people aged over 70, medical card coverage of the over-70s population is approximately 93%. In comparison, the medical card coverage of the under-70s population is of the order of 36%.
In the recent budget, changes to the over-70s eligibility criteria were announced to deliver €25 million in savings during 2014 from the expenditure on over-70s medical cards, which is in the region of €750 million annually. Under this proposed legislation, the income limit for an over-70s medical card is to be set at €500 per week, equivalent to an annual income of about €26,000, for a single person. For a couple, the income limit for the over-70s medical card is to be set at €900 per week, equivalent to gross annual income of almost €47,000.
Those affected by these revised thresholds will qualify for an over-70s GP-visit card. A single person aged over 70 with a gross income of up to €700 per week, or approximately €36,000 per year, will continue to qualify for free access to a GP. A couple over 70 years of age with a gross income of up to €1,400 per week, or approximately €72,000 per year, also qualify for a GP service without fees. In addition, under the drugs payment scheme, DPS, the HSE will meet the prescription drug costs of older people without a medical card who face drugs costs higher than the DPS threshold of €144 per month. This means that a single person aged over 70 with a gross income in excess of €500 per week or a couple with an income in excess of €900 per week will have to pay no more than approximately €33 per week on prescription drugs.
It is estimated that approximately 35,000 people will have their medical card replaced with a GP-visit card under the new income rules. It is necessary to reassure people in their 70s and older that we are implementing this measure in a manner that is intended to avoid affecting the most vulnerable of our elderly population. Out of every five people aged over 70, the four poorest will not be affected by this budget measure. Therefore, it is useful to note that 10% of those aged over 70 who previously qualified for a medical card will now qualify for a GP-visit card instead. Every person aged over 70 living on the State pension alone will still qualify for an over-70s medical card. The new income limits for over-70s medical care is more than twice the level of the basic State pension of €230 per week for a single person and €436 per week for a couple. Therefore, following implementation of this budget measure, just 7% of over-70s, those with the highest incomes, will not qualify for either a medical card or a GP-visit card. In other words, 93% of over-70s will continue to be covered for free GP care, either through a medical card, which would be the bulk of that group, or a GP-visit card.
As I stated, there has been a significant expansion in the GMS scheme and, while the rate of increase in the numbers of people with eligibility under the GMS scheme has declined, the overall number of people with eligibility has increased. We must ensure those most in need can qualify for the service. We have an obligation under the legislation to ensure the State is not paying for a service for those who are no longer entitled because their situation has improved. To this end, a critical element of probity in the medical card scheme is the ongoing review of client eligibility by the HSE. Senators are aware that, under budget 2014, medical card probity measures were announced whereby significant savings are to be achieved by improving the accuracy of the medical card system. This is intended to ensure those who are entitled to medical cards continue to hold them and those who are not entitled to medical cards do not.
I am aware there has been public concern that cards may be indiscriminately withdrawn or cancelled. This concern or perception is similar to the misconception that cards awarded on a discretionary basis are being withdrawn or refused arbitrarily. This is not the case. Let me put it on the record, to dispel any misconceptions that might still exist, that in line with the legislation, there has never been an automatic entitlement to a medical card on the basis of having a specific illness or condition, there has been no change to the policy on discretionary medical cards in the past year, the scheme continues to operate in such a way that those who suffer genuine financial hardship as a result of a medical condition receive the benefit of a medical card, and notwithstanding the need to secure savings under the medical card scheme, nobody who is entitled to a medical card will lose it or be refused one. I stress again that no person meeting the eligibility conditions laid down in the legislation for a medical card will be affected.
We want people to be clear on their entitlements and this should help ease the fears of those who have been worried unnecessarily. To this end, the HSE devised a wide-ranging plan to improve the provision of information to the public about medical cards. On 30 October last, the HSE announced a communications campaign designed to raise awareness of the rules governing eligibility for medical cards. This is just one example of how this Government is focused on improving the health service. While it may not be affordable to provide medical cards to the entire population, this Government is committed to introducing, on a phased basis, a universal GP service without fees within its term of office as set out in the programme for Government and in the Future Health strategy framework.
The introduction of a universal GP service free at point of use constitutes a fundamental element in the Government's health reform programme and the introduction of universal health insurance. A universal GP service will underpin the delivery of health care close to people in their communities, at the lowest levels of complexity and at the lowest levels of cost. This is a critical step on the road to universal health insurance and eliminating the two-tier health system.
As announced in the budget, it has been decided to commence the roll-out of a universal GP service free at point of use by ensuring that all children aged five years and under will have access to a GP service without fees. New additional funding of €37 million has been ring-fenced by the Government to fund this new initiative so that it does not draw on resources for the medical card scheme. Including the 93% coverage of the over-70s population, this additional coverage of those under six will mean that almost half of the population will have access to GP services without fees. This Government is committed to achieving the goal of a universal GP service before the spring of 2016.
I commend the Bill to the House and look forward to hearing the views of Senators.