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

Central to the principle of intergenerational solidarity is community rating and risk equalisation. It is obvious from the statistics that insurers are cherry-picking the newer entrants to the markets. One of the reasons for the choice of 260 policies arises from a Bill on advanced and non-advanced health care products. We were told at one stage that a substantial number of existing policies would qualify as non-advanced, so they would attract a lower duty and risk equalisation levy. That did not happen. They all turned out to be in the advanced category. The difficulty I have with the section, and the reason for my amendments Nos. 3 and 4, is that the VHI will be allowed to make a 12% return on its equity before it is deemed to be over-compensated. When the return on equity goes over 12% it will receive a lower amount from the fund. The point is that a return of 12% on equity investment is deemed to be good. The Minister stated that the HIA had done the assessment and deemed that a 12% return was reasonable; however, the Minister has not always agreed with its recommendations. I cannot believe he can cherry-pick and dismiss other proposals and recommendations by the HIA. For those reasons, I believe this is critical to ensuring we have a stable, viable, vibrant health insurance market.

The Minister referred to the rise in the cost of claims and payouts on a pro rata basis, but the reason is that 240,000 healthy young people have left the market, so the burden is falling on fewer people the whole time. We have a smaller cohort of younger healthy people cross-subsidising older people who need more supports and will be in hospital more often and drawing from the health insurance companies. That is an actuarial fact that cannot be disputed. The private health insurance companies and the Health Insurance Authority appeared before the committee and what they said concurs with the report published by Colm McCarthy. The only dissenting voice is that of the Minister. This proposal will cause difficulties in the sense that it will not allow companies to attract and cherry-pick customers. It is better that people have some health insurance rather than no insurance, because there will be at least some transfer in risk from healthier younger people to older people. If they are not in the market, it will cause major problems. I believe the Minister is presiding over an insurance market that is in crisis.