Michael Kitt (Galway East, Fianna Fail)

I welcome the Minister's comments on this legislation. The explanatory memorandum refers to the common good in regard to the health insurance market. In particular, I am struck by the phrase "intergenerational solidarity between all insured persons" and the acknowledgment of the importance of community rated health insurance. There has been widespread concern that older people might face a substantial hike in their health insurance costs upon renewal next year. The Bill takes steps to deal with that issue. As the Minister explained, it provides for a levy on every individual who pays health insurance as well as for a refund according to age. The effect of these provisions is such that younger people will pay more in levy than they receive in refund while the opposite will be true for older people. This represents a good attempt by the Minister to deal with this issue, notwithstanding her indication that she intends to introduce amendments on Committee Stage.

The Bill seeks to ensure a degree of subsidisation for older people who avail of health insurance in the wake of the Supreme Court decision last July whereby the risk equalisation scheme was ruled illegal. That decision obliges us to ensure a means of providing subsidy for those who would find it difficult to pay high premia. Health insurance plans can be tailored for older and younger people at totally different prices. The analogy that was made in regard to motor insurance companies is a good one. As we all know, young people pay far more than older, more experienced drivers for car insurance. In the context of health insurance, the concern has been that the opposite would be the case, with older people facing far higher premia than younger people. This legislation will allow health insurance companies to focus on the quality of cover they provide and the provision of additional services to consumers rather than the risk selection which would cause major difficulties for older customers.

We are all concerned that there should not be an intolerable expense for people in ensuring they are covered for any operations they may require, such as hip replacements, cardiac procedures or cataract removal. Such procedures are more likely to be required by older people. The various insurance companies can now offer different types of plans. For example, young people may be interested in benefits relating to sports injuries. Unlike older people, they are generally not concerned with hip replacements and cardiac care.

The Bill sets out the various levies and subsidies applicable to those under 50, over 50 and over 80 years of age. These are interim measures, applicable for three years, to stabilise the market. The community rating levies applicable to insurance companies have been set at €160 for each adult and €53 for each child insured. The Bill provides an incentive for people to take out insurance earlier in life via the inclusion of lifetime community rating provisions. For the longer term, the Government is working on a new risk equalisation scheme that will meet all the legal requirements.

In various professions and sectors, group schemes are offered to entice people to take out health insurance. In my former life as a teacher, I was aware of the operation of such schemes through the teachers' unions, the INTO, TUI and ASTI. There was encouragement for members to enter the private health insurance market via the special group rates available to those who applied through these types of group schemes.

People have long been aware of the tax relief available to them, although not everyone has been able to avail of it. In this debate on health insurance legislation it is good to note that many people took out health insurance at a relatively young age. In that context, the proposal regarding lifetime community rating is welcome.

On the topic of older people, I raise again the decision to move to Dublin the processing of medical card applications for those aged over 70 years. Given the increase in the number of people employed to deal with rising unemployment and the consequent increase in the number of people seeking social welfare benefits, one would also expect the number of people working in the Department's medical card section, whether in Galway, Cork, Dublin or elsewhere, to increase. I am disappointed, therefore, that staffing levels in the medical card section in Dublin have not increased. I hope action will be taken to address the problems encountered by those seeking to contact a member of staff in the section by telephone.

People want to discuss medical cards and medical cover with officials who work in their locality. This is difficult when it is necessary to deal with an office in Dublin and the number of staff dealing with medical cards appears to have declined. I am aware of a proposal, albeit one which may not materialise, to reduce the number of such staff from 300 to 100. If that is the case, people will find it very difficult to determine the status of their application for a medical card.

People are not clear about how the appeals system for medical cards works. The mechanism for dealing with appeals was always clear in Galway. I am able to follow a paper trail from the community welfare officer through to my local office in Galway city and, from there, through to the appeals office in Ballinasloe. This is no longer true in the case of those aged over 70 years who apply for medical cards because the personal service available to people in the regions is to be withdrawn. I make this point in passing because it is important to provide a good service and a proper office which people can contact.

See this speech in context