Dáil Éireann Debate, Thursday - 29 March 2007
34 Mr. Allen asked the Minister for Health and Children her views on the recent statements by a person (details supplied) that the Irish private health insurance market does not need risk equalisation to ensure community rating; and if she will make a statement on the matter. [12018/07]
Amharc ar fhreagraCommunity Rating has been an important factor in keeping the cost of health insurance at an affordable level over people's lifetimes and in particular their old age. The ultimate beneficiary of risk equalisation is the insured population, particularly the elderly and the ill, who would otherwise be vulnerable to the effect of risk selection, and would find the cost of health insurance unaffordable when it was needed the most.
Risk Equalisation helps ensure that community rating is sustainable into the future and the recent High Court decision, arising from a challenge to the Government's right to regulate the private health insurance market, was a strong endorsement of the regulatory framework, including the risk equalisation scheme. A community rated market cannot exist without a supporting mechanism like risk equalisation.
A market without the balancing measure of risk equalisation to address the effect of mandatory community rating exposes insurers with higher risk members to spiralling claims and ultimately threatens their viability while opening the possibility of super-normal profits being made by other insurers, at the expense of consumers and the insured community as a whole.
The Government is also committed to ensuring that competition in the market works to the benefit of all health insurance subscribers. To that end, I will consider the recommendations from the Reports of both the Competition and Health Insurance Authorities which I have already received, and from the Barrington Group when it reports back to me at the end of this week.
