Mary Harney (Dublin Mid West, Independent)

I introduced the legislation on the deadline but that was prior to the Supreme Court's decision to strike down risk equalisation. I want to point out some facts. We are discussing the reserves ratio. The VHI has 82% of the over 60s market and 92% of the over 90s market. I strongly favour community rated health insurance because it allows older and sicker people to afford insurance on the same basis as younger customers. If we are to retain that system, it will require intergenerational support. The scheme which was introduced when the market was opened up to competition on foot of an EU requirement was, unfortunately, struck down by the Supreme Court in 2008. That changed everything and, in the interim, we have introduced tax relief at source.

I remain determined to bring before the Government shortly a comprehensive set of measures not only in respect of the capital requirements of the VHI but also on a sustainable financial model for the company. If one company has an unfair risk burden, we clearly will not have a market that is capable of being fair in all circumstances. We need a new risk equalisation scheme in Ireland and in the meantime we have provided for a scheme of tax relief at source which has been approved by the EU as a temporary measure. We also need to sort out the VHI's capital requirements and the three companies' respective market ratios. The ratios vary considerably at present but I would like to see a healthier market where at least three players have similar shares.

Notwithstanding the financial pressures we currently face, it is encouraging that only 1.6% of people have dropped out of health insurance. This is because we keep insurance costs affordable, particularly for older and sicker people.

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