Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The key issue here is the impact this will have on policyholders. On budget day, the Minister characterised the change as one that would affect so-called gold-plated policies, but even he would acknowledge at this stage that this was not a fair characterisation. The Department estimates that over 50% of policies will be affected by this change and the industry estimates a much higher percentage. The final figure will emerge over time. We know that increasing numbers of people are relinquishing their health insurance, although it is one of the last items of expenditure they are prepared to let go. People are prepared to forfeit many other items from their lifestyle to maintain health insurance for as long as possible.

This will contribute to the pattern we are seeing of an increasing number of people, particularly younger people, falling out of the health insurance market. It has the potential to destabilise the market. Premiums will inevitably increase as a result of this. It seems to me it is moving further away from the Government's stated policy in the area of health, which is universal health insurance. That model will work only if as many people as possible can afford to hold on to their health insurance in order that the State will, in essence, pay the insurance for everybody else. With the percentage of people with their own policies declining all the time, that trend is likely to accelerate as a result of these and other changes announced by the Government, which means the Government is moving further away from its objective. The Minister should explain the rationale behind this. It is a very significant revenue earner, in excess of €100 million in a full year, but have we fully thought through the consequences of this change?