Billy Kelleher (Cork North Central, Fianna Fail) | Oireachtas source

I welcome the witnesses. Dr. Lynch, in his opening remarks, said:

The Government's priority is to ensure a sustainable market for private health insurance, in which those who wish to purchase cover can buy it at an affordable price. In addition to meeting the needs of today, the private health insurance market is also seen as a key building block on which to move to universal health insurance in the years ahead.

Clearly, many of the policy decisions that have been made in recent times are contrary to this stated policy of making health insurance affordable. The market is shrinking and there are huge difficulties for people because of the downturn, as they have less disposable income, but policy decisions have contributed, and will continue to contribute, to increased health insurance costs for families. I refer to the recent legislation that was passed which was meant to differentiate between advanced and non-advanced plans. The Health Insurance Authority conducted a survey, which pointed out that 47 plans would qualify as non-advanced. Following the enactment of the legislation, non-advanced plan is available in the insurance market. What do the officials expect people who are under huge pressure and can barely afford private health insurance as it is to do, given that health insurers told the committee earlier that the only way they can introduce non-advanced plans that will attract a lower levy will be to strip benefits out of their current plans? The policy agreed by the Department, Government, HIA and so on is to ask those who can least afford it to put their hands in their pockets to pay for some of the benefits that have been stripped from plans. This is bizarre if this is true. Otherwise the health insurers are making it up but, one way or the other, this is a major problem.

From the opening statements in the Dáil on the risk equalisation Bill, we were led to believe there would be advanced plans. We subsequently found out no such plan is available to anybody in the State from any insurer because of the criteria that are being used. I am concerned about that for a number of reasons. First, the stated policy seemed to disappear during the passage of the Bill without a rational explanation and, second, when people are forced to reduce their health cover because they cannot afford the rates, the health insurers will strip out benefits providing approximately 66% coverage for the non-advanced plan, which means the subscribers will have to pay the difference out of their own pockets, for example, when going for a scan which, traditionally, would have been covered by the lower cost plans. It is utterly bizarre and I would like Dr. Lynch to explain this because nobody has explained how the policy changed in the meantime.

Some health insurers have said this will substantially benefit the VHI because of the age related tax credits. I accept they are for the benefit of subscribers and not the company but the Department has a vested interest in making sure the company is minded and put in cotton wool because there is a huge hole in its balance sheet which will have to be filled in the context of capital requirements under the EU policy on central bank licensing and governance. Clearly, the Department has to look on the VHI with a slightly jaundiced view in comparison with the other insurers to make sure the company is protected. Some of the changes in non-advanced care were undertaken primarily for that reason.

On the issue of lifetime community rating and our move to UHI, I do not doubt the Minister's commitment, given it is his stated policy and that of the Government and the Department, but the timeframe is the issue. If this drifts in the interim, huge swathes of people will leave the market and others will not take out health insurance policies. That is contrary to the policy of encouraging as many as possible to take up private health insurance. Lifetime community rating should be examined urgently because if UHI drifts for a year or two, the market will have shrunk further and younger people will be less encouraged to enter the market.

I refer to per diem and the hospital designation of beds. The insurers informed us earlier that this will have a catastrophic effect on the viability and sustainability of the heath insurance market. If an individual has paid taxes and he attends an accident and emergency department, he is entitled to treatment. If this designation happens, he will pay on the double through his taxes and his health insurance premium. The health insurer will be forced to cough up, which effectively means the subscriber again.

This is just a revenue-generating measure, full stop. It has nothing to do with policy. It is just about revenue raising, which is putting significant pressure on the insurers who are passing these inflated costs on to the subscribers and forcing more people out of the market. In respect of the HIA's assessment of the market, it has quite a substantial cash reserve of €8 million available to it. Has it carried out detailed assessments of the levies, the advanced and the non-advanced plans and the impact this could have on families already struggling to retain the lower-level plans? How often does it carry out detailed, independent analysis of the market? Does the delegation accept the Milliman report on the VHI or does it think the VHI is correct in saying that Milliman looked at it through a different matrix?