Mary Harney (Dublin Mid West, Progressive Democrats)

The legislation that was struck down had its origins in the 1994 Act. It was initiated by the then Government and the Minister was Deputy Brendan Howlin but I am not making an issue of that. I am simply saying that is the factual position. Every Minister for Health who has been in office since 1994 has strongly supported, through legislative measures, risk equalisation. The Supreme Court found that we should have risk equalisation, or community rating, within the plans. Obviously, we must accept the decision of the Supreme Court but if there is a plan that is particularly attractive to young people, particularly young couples who have children, and a different plan involving cataracts and so on that is only attractive to older people, it is difficult to see how we can have community rating within that environment. We must deal with the realities and I would like to find a solution that would be legally sound — I have to take the advice of the Attorney General — and one that would be immune from legal challenge, but I do not believe any of us have that luxury because we have been involved in litigation in this matter for a considerable length of time, both at national and European levels. The advice we are taking currently involves looking at all options as to how we can ensure that younger people support older people.

The VHI is required by law to be authorised by the end of this year. That means it must have a reserve capacity of 40% of its premium income. It currently falls far short of that. That is the position. It is not a question of the amount of profits a company makes, it is a question of whether the company is capable of being authorised on the same basis as all of its competitors. That will be a challenge. The reason it is important that the VHI is regulated on the same basis is to ensure we have a level playing field. It has been a bone of contention, which I understand fully, among the VHI's competitors that they have to put 40% of their premium income into a reserve fund and their competitors do not have to do that. That creates an unequal playing field. To be fair to the VHI, however, it has 68% of the market here and approximately 70% of the over 65 and 60 year olds in the market where most of the costs occur. The only way we can sustain community rating on an affordable basis is by ensuring that younger people support older people.

I hope to bring proposals to the Government in the next few weeks if we can but I must await the advice of the Attorney General and other advices from our actuarial advisers before I can proceed further.

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