Mary Harney (Dublin Mid West, Progressive Democrats)

There is no price control on insurance. The Government does not have to approve the pricing proposals of any company in the market. Traditionally it was the case that the pricing policies of the VHI had to be approved by the Government but this all changed as a result of the legislation to move the VHI to a commercial situation and it is in order that this should be a matter for the board and the management of the company, not for ministerial or Government approval.

With respect to the pricing policies of the companies, it is a fact that 52% of our population has private health insurance; in fact it is slightly more at 2.2 million out of 4.2 million or 4.3 million. It has moved upwards. Since liberalisation it has grown from approximately 36% or 37% even though many were of the view that we were at saturation point at that level. The numbers have increased due to a growth in the market, particularly the numbers of young people who have been attracted. In light of the Supreme Court decision, no risk equalisation payments would have transferred to the company that has by far the largest number of older people as subscribers. The claims made by an 80 year old are four times greater than those of a 40 year old and those of a 60 year old are twice those of a 30 year old. lf one company has 320 times more people aged 80 or over compared to another company, clearly that company will have a higher claims experience. The basic plan would have increased from €600 per adult. In the case of Mr. and Mrs. Murphy on the basic plan at €1,200 a year, this would have more than doubled if we did not take this initiative.

With regard to the risk equalisation legislation, the case in court was argued on 13 or 14 grounds and the decision of the court was made with regard to one aspect. The legal advice available to me, the official advice from my Department and the actuarial advice all stated that it will take at least two years to draft the legislation in light of all the issues that have arisen. This is the reason we have come forward with a measure for a three year period while we draft the legislation.

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