I would like to welcome the Minister of State, Deputy Butler, back to the House for what I think is the third time in 24 hours. She is back and she is very welcome.
Health Insurance (Amendment) Bill 2023: Second and Subsequent Stages
Question proposed: "That the Bill be now read a Second Time."
I am pleased to have this opportunity to address the House on behalf of the Minister for Health, Deputy Stephen Donnelly, on Second Stage of the Health Insurance (Amendment) Bill 2023. The Bill was published on 16 November and concluded its passage through the Dáil on 29 November. This is an annual, technical Bill, comprising seven sections, all of which are focused on specific areas of health insurance.
I will start with an overview of the market and the risk equalisation scheme. Currently, just under 47% of the population in Ireland hold private health insurance. This amounts to 2.48 million people and represents a total annual premium income of approximately €3.18 billion. Health insurance in Ireland is provided according to four principles, namely, open enrolment, lifetime cover, minimum benefit, and community rating. Unlike a risk-rated market in a community-rated private health insurance market, everyone pays the same price for a particular health insurance policy. Insurers cannot take into account personal circumstances, such as health status or age, in which case older and sicker people would be paying much more for health insurance than they currently do.
The risk equalisation scheme is the mechanism designed to support the objective of a community-rated health insurance market. It has operated since 1 January 2013 and is provided for under the Health Insurance Acts. Under the risk equalisation scheme, funds are redistributed in the form of credits to compensate insurers for the additional cost of insuring older and sicker members. The credits are funded by stamp duty, which is payable by health insurance providers for each health insurance policy issued. The stamp duty levies are collected by the Revenue Commissioners and are transferred to the risk equalisation fund, which is administered by the Health Insurance Authority, HIA.
The risk equalisation scheme is designed to be Exchequer-neutral. In other words, the credits are funded entirely by the stamp duties raised annually. The risk equalisation credits and stamp duty are updated on an annual basis to ensure they align with the estimates of the insured population and the type, number and cost of claims that will be made on the health insurance plans. Amendments to the health insurance legislation are required each year to update the level of risk equalisation credits and stamp duty levies necessary to fund the credits. This is the main purpose of the Bill.
The Health Insurance Authority provided the Minister with an annual report which analysed market data for a 12-month period from 1 July 2022 to 30 June 2023. This report recommended the risk equalisation credit rates and the stamp duty levies required to fund them to apply from 1 April 2024. The Minister, Deputy Donnelly, approved the risk equalisation credits to apply in 2024 and the Minister for Finance has approved the corresponding stamp duty levies.
There are three risk equalisation credits, and this Bill makes amendments to all three. This year, there will be an increased proportion of credits relating to health status, rather than age. Increasing the proportions of credit associated with health status means that more credits are based on actual claim experience, rather than risk predictors, such as age. This helps to share the risk effectively across insurers. The amendments outlined in the Bill take into account the ongoing sustainability of the private health insurance market; the aim of avoiding overcompensation being made to insurers; and the aim of having fair and open competition in the market, as is required under the EU framework for state aid.
To summarise, the Bill allows us to maintain a community-rated health insurance market. The provisions of the Bill increase the effectiveness of the risk equalisation scheme. Risk equalisation credits based on age are reallocated to those based on health status, without increasing the stamp duty payable. Increasing the proportion of credits associated with health status helps to share risk more effectively across insurers. Importantly, the programme for Government commits to retaining access to private healthcare services for people in Ireland, ensuring choice for those accessing healthcare. This Bill continues our policy of ensuring solidarity with and affordable premiums for sicker and older people. These policy aims are also supported by the public.
According to a survey carried out in 2021 by the Health Insurance Authority, 79% agreed that premium prices should not be dictated by a person's current health. In the same survey, 72% agreed that older people should not be charged more for health insurance.
Private health insurance policy aims to progressively align with Sláintecare reform objectives. The Government is committed to the Sláintecare vision of a universal single-tier health and social care system. The Minister for Health, Deputy Donnelly; the Minister of State, Deputy Naughton; and I are committed to the continued delivery of Sláintecare reform and to working with the HSE to deliver this reform agenda. On behalf of the Minister, I commend this Bill to the House.
I thank the Minister of State for a comprehensive opening statement which I hope Members will not be repeating in their contributions. Senator Clifford-Lee has six minutes.
You will be happy to hear I will not take the full six minutes, a Chathaoirleach Gníomhach. I thank the Minister of State for coming in and outlining the Bill. As she said, it is a technical Bill that we debate annually. The community rating, which is a central tenet of private health insurance in Ireland, is important. It is great she has outlined the various changes to support the community rating system we operate. It is in direct contrast to other jurisdictions wherein sicker and older people pay astronomical prices for private health insurance. Some 47% of people in Ireland are privately insured for their health needs. It is about giving people choice and putting forward a good public system and health insurance system for those who choose it, while also being able to access the public health system, if they so choose. I look forward to all Stages of the Bill being completed today.
I welcome the Minister of State back to the House again today. As Senator Clifford-Lee and the Minister of State pointed out, this Bill comes before us every year, usually about two weeks before Christmas. It is technical but important. In our country, health insurance is affordable and does not discriminate in terms of age. When we look at what happens in America and other countries when it comes to health insurance, we are lucky our system is affordable. Ideally, we would have a public health system whereby health insurance is not required. That is what Sláintecare envisages. Hopefully, as a first world country with ample resources, we will reach a situation where people do not need health insurance and we will not have to debate this Bill. Until that time, this Bill is important and has to be passed. I assume it will flow through the House swiftly.
It is always good to see the Minister of State. She is welcome. This Bill is an annual review of the risk-equalisation mechanism that supports the community-based health insurance market. Risk equalisation as a principle ensures costs are constant across the lifespan of an individual. It seeks to ensure, where possible, that age, gender and health status do not influence the cost of an insurance product.
Sinn Féin recognises the reliance of many people on health insurance and will support the Bill, as we have in previous years. The high level of people relying on private health insurance - I think it is 47% - is an indictment of Fine Gael and Fianna Fáil's failure to deliver a fit-for-purpose public health service. People take out private health insurance because they do not and cannot trust the public health service to deliver timely access to the care they need. I do not blame people for using private insurance. If they can afford it, they do not see a choice. The consequences fall on those who cannot afford it and that is wrong. The health service should be based on three principles: that it is free at the point of delivery, that it is there for everyone and that use of it is based on clinical need. That debate will continue into the new year.
I draw attention again to the horrific status of University Hospital Limerick. I checked the figures again this morning. Patients on trolleys for the year are at 20,216, according to INMO figures. That compares to 18,000 for last year.
I am giving the Senator some latitude but it is not topical today.
I appreciate that but I would not be doing my job if I did not raise it.
Fair point.
It is an issue of continuing concern and we are worried about Christmas and, particularly, about the freeze on hiring. That is a massive problem for UHL. The management has said that as well. I will end at that point because we support the Bill and I do not want to delay matters any further.
I thank all the Senators for coming in and, as they do every year, supporting this Bill. It is a technical but important Bill, and it has to be done.
A high proportion of the population holds health insurance, 47%, while the Government continues to maintain the community-rated private health insurance market. I highlight the fact that 1.6 million people have access to a medical card or a doctors-only card. Some 185,000 people have access to discretionary medical cards. In many cases, those people have illnesses but would not normally qualify for the medical card. We have made many improvements, including the addition of over 22,000 healthcare workers in the lifetime of this Government and an increase of 1,000 beds in hospital capacity in the past three years. The new public-only consultant contract is in place and more than 1,000 new and existing consultants have signed up to date. Public patient inpatient hospital charges have been abolished, investment in women's health has increased and State-funded IVF has been introduced.
Notwithstanding these improvements, I take on board the challenges and what Senator Gavan said about University Hospital Limerick. It is raised constantly and there are many challenges there, notwithstanding the new 96-bed block that is being constructed and a further one to come. We should not compare hospitals but I am in Waterford and University Hospital Waterford is the second busiest emergency department in the country and we work very well with community and step-down beds. We have a situation where we did not have anyone on a trolley in the last three years. That is by constant management and energy. The general manager is on the floor of the emergency department three times every day, seven days a week. There are learnings from other hospitals. I am not trying to compare one hospital to another because I do not know the intricacies and I know there are huge capacity demands in the Limerick area. I know this is high on the Minister's radar but I will raise it again.
Question put and agreed to.
When is it proposed to take Committee Stage?
Agreed to take remaining Stages today.
Bill reported without amendment, received for final consideration and passed.