Mary Harney (Dublin Mid West, Progressive Democrats)

In reply to a priority question from Deputy Reilly on 25 November, I said that the measures announced by the Government the previous week should not, in themselves, lead to an overall increase in the €1.5 billion in private health insurance premiums paid by all health insurance customers as the new levy on health insurance companies will yield approximately the same amount as the enhanced tax relief for those aged over 50. However, I emphasised that it would be a commercial decision for individual health insurance companies as to how they chose to reflect the overall impact of the measures in setting their premiums. Since I last answered questions on this matter, Quinn Healthcare and the VHI have announced price increases for customers taking out or renewing policies from 1 January 2009. Quinn Healthcare is increasing prices by an average of 16%, VHI's increases average 23%, while Hibernian Healthcare has not announced any increase to date.

It is a matter for the individual companies to explain and justify the levels of the increases they are introducing. I do not believe the measures announced by the Government have had any significant impact on these decisions. There are several underlying cost pressures in private health insurance, including medical inflation, the ageing of the insured population, increased numbers of procedures and greater economic pricing of public hospital services to insurers.

I hope that young people and families do not leave the market. Health insurance cover in Ireland represents good value for all age groups. The Government will bring forward the lifetime community rating regulations for enactment in 2009. These will provide a powerful incentive for people to take out insurance cover earlier in life and to retain it. Anyone inclined to cancel their insurance now should consider carefully that they may have to pay a higher premium to re-enter the market at a later date. In introducing the measures announced on 19 November, the Government had to choose between allowing older people to be forced out of the market and trying to maintain the key principle of intergenerational solidarity whereby the young support the old.

I expect to have a response early in the new year to our notification of the measures to the Commission.

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