James Reilly (Dublin North, Fine Gael)

If the Minister is concerned about niche products, all she has to do is establish a real regulator who could rule on the content of standard packages and add-ons. Given that the HSE has put the arm on VHI for €50 million up-front for next year, perhaps this is a revenue gather exercise on the part of the Government as much as anything else.

She also claimed that the levy would not lead to an overall increase in health insurance premia but we know what actually happened. VHI's 23% increase will probably reap it €230 million net. She accused certain insurers of tailoring their plans to suit younger people. Insurers must provide minimum benefits under each plan, including cataracts and hip replacements. If she is genuinely concerned about the level of protection offered under minimum benefits, she would have revised the requirements rather than introduce a levy which increases the cost of health insurance. Many of these issues could have been addressed by a regulator at no cost to those who pay for insurance.

VHI is increasing the cost of its core plans, which generally include a larger cohort of older people, as opposed to its company plans, which include more younger people. Applying higher premia to older people is in breach of the principle of community rating and is contrary to what the Minister was supposedly trying to prevent. Perhaps she will investigate this issue and revert to the House on it. I would like to see the facts that would prove these allegations wrong.

Community rating is provided for in section 5 of the Health Insurance (Amendment) Act 2001. Insurers are required to charge the same rate for the a product regardless of a customer's age, sex, health status or sexual orientation. The Bill before us does not improve the definition of community rating but merely amends it to reflect the tax credit and the Minister's health insurance levy. This legislative change is unnecessary to strengthen the definition of community rating or reinforce inter-generational solidarity. That has been upheld by the courts and I do not think any Member of this House would undermine community rating.

The Government needs to clarify whether the levy is being ring-fenced for health purposes rather than accruing to the Exchequer.

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