Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to discuss the Health Insurance Bill. Health insurance is a topic that is gaining ever more discussion time and when one considers the nation's demographics it comes ever more alarmingly into focus.

While much of Europe is already experiencing the phenomenon of an aging population, Ireland will have to wait until after 2025. None the less, Ireland's population is aging, with the number of young adults in the country falling by 10% according to recently released figures by the Central Statistics Office. The latest census results indicated that the 19 to 24 age group was the only category to show a fall, with a decrease of 12% since the last census in 2006. In contrast, the number of older people - those aged over 65 - has increased by 14%. There are more older people now living in nursing homes - 20,000 - and in residential hospitals - 5,000 - and because those over the age of 65 use about four times the number of health services that younger people use, that could have major implications for the country. By 2030 there will be 818,000 people over 65 years of age in the country. That has significant implications for both health and social welfare, and this Bill is the Government's far-sighted response to the issue of health insurance.

The Health Insurance (Amendment) Bill 2012 provides for a permanent risk equalisation scheme to replace the current interim scheme of age-related tax credits and associated community rating levy provided for in the Health Insurance Acts. The interim scheme expires on 31 December 2012. Risk equalisation is essentially a method for compensating insurers that carry heavy risk burdens by means of payments from other insurers that carry lighter ones, and its role is to protect the current system of community rating in private health insurance.

The interim scheme is a system of tax credits which provides for a cost subsidy from the young to the old. On current estimates, the scheme will have transferred a net amount of some €275 million from younger to older lives in 2011. The estimated amount for 2012 will be €360 million. The VHI has been a net beneficiary of the scheme due to its older client base. The scheme is funded through a community rating levy, or stamp duty, charged to insurers. This amounted to €197 million in 2009, €318 million in 2010 and €343 million in 2011.

This Bill is a welcome addition to the Statute Book and I have no hesitation in commending it to the House.

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