Dáil Éireann Debate, Wednesday - 18 December 2013
8. Deputy Lucinda Creighton asked the Minister for Health the policy measures he has taken to level the playing field in the health insurance market between competitors that have low levels of elderly policy holders and those that have none; and if he will make a statement on the matter. [54121/13]
Amharc ar fhreagraThe VHI has over 65% of all private health insurance policyholders between the ages of 60 and 69, 70% of all policyholders between 70 and 79 and 80% over the age of 80. What has the Minister done since coming into power in 2011 to level the playing field in this regard? What has he done to ensure all health insurers play their part in taking on older policyholders?
I thank the Deputy for her question because it is an area very much to the core of what the Government is doing in health insurance. There are three legs to this stool, namely the Department of Health, the Health Service Executive, HSE, and the private health insurers. The Deputy is correct that there is a much greater proportion of older people in the VHI. For example, Laya Healthcare has 22% of the market but only 8% of those over 70 and 80.
We have introduced the risk equalisation scheme.
Which Fine Gael opposed when it was in opposition.
There was much debate about this several weeks ago. The scheme is effective to the point that it compensates for 78% of those over the age of 70 and 85% for those over 80, rates which were 73% and 82% respectively last year. The plan is to get it to a rate of 90% in terms of its effectiveness in compensating insurers who have older people on their books.
Let us call a spade a spade. If there were great unfairness or overcompensation, we would not see the disparity between the VHI with such a high preponderance of older clients as opposed to the other players in the market. There is a concern that insurers will try to segment the market by bringing in new products. For example, VHI took off cataracts, knee and hip replacement procedures from its plan B which was aimed at dissuading older people from buying the policy. There are nearly 270 different insurance policies available which is set to confuse consumers. The Health Insurance Authority, HIA, will be beefed up considerably to deal with these issues in the market place. The risk equalisation scheme is the mechanism the Government uses to ensure a level playing field in the market.
I thank the Minister for his reply but take issue with the assertion that risk equalisation has been effective. The figures show clearly that the opposite is the case. At this stage, it has become apparent that this idea of levying and subsidising is not actually working. Has the Minister considered a proper regulatory framework which would oblige all health insurers to take a reasonable proportion of older insured patients? If he does not, there never will be a shift from the VHI.
On entering office, the Minister commissioned a study by Matheson and Goodbody into the various options for the VHI, including its break-up. Bizarrely, the chief executive of the VHI informed me at the health committee two weeks ago that he has never seen this report. Has the Minister seen the report? Members should also see this report.
There have been several reports on the VHI, many of them done by the Department’s actuarial advisers, Milliman. These are the reports the VHI and the Department would take up. I have seen the Matheson report too.
The risk equalisation scheme is working. It seeks to compensate insurers for the cost of older policyholders who tend to be sicker and use health services more. We have to be careful, however, that it does not overcompensate. That is why the rate is set and it is agreed with the European Commission that if an insurer makes profits of more 12% three years running, then it is seen as overcompensation and the moneys are taken back from them to be put into the health insurance fund. As this scheme becomes more effective, the other insurers will see it will be worth their while and profitable to take on older policyholders.
We are operating on the basis of aspiration rather than concrete or tangible evidence of risk equalisation working. The fact no consideration has been given to any alteration of the regulatory regime seems to rule out an important and relevant option. While it is some relief that the Minister has seen the Matheson report, it is bizarre that the chief effective officer of the VHI has not seen it. Will the Minister share that report with the House, so that those interested in this topic will be able to analyse some of its proposals, particularly as we move towards universal health insurance? I cannot understand why the report is suppressed.
The suggestion of forcing through regulation that a certain number of people of a particular age group must be insured would raise all sorts of problems with competition law. In any event, the carrot is always better than the stick. The VHI is positive about the risk equalisation scheme while the other insurers are negative. If they were so concerned about the tariffs applied in the scheme, then they would take on more older people. I believe they will in the future.
There is much planning ongoing on how to beef up the HIA to allow it regulate the market to reduce the number of policies available because they are just causing confusion.
People renewing their insurance should visit the website www.hia.ie which has good comparative information available on what are the best plans suited to them.
Will the Minister publish the Matheson report?
