Liam Twomey (Wexford, Fine Gael) | Oireachtas source

I concur with many of the remarks made by Deputy Joe O'Reilly on this issue. It is vital the Minister would take on board what is happening and deal with this issue, which has been raised time and again in regard to audit and governance. The bills issued to and by the VHI and other health insurance companies would essentially be considered meaningless in private business as there is no breakdown of costs or of why patients are paying so much. To be honest, such practices are unacceptable. We have known about this for years and it has been discussed time and again, both in our clinics and in public fora, including in this Chamber. Patients are paying for a service they did not receive and they have no idea why certain costs were incurred. If one puts in a request to the insurance companies, they simply stonewall. During the era of the Celtic tiger, it was perhaps felt this was not an issue worth tackling but that has changed dramatically.

Risk equalisation is vital for community rating and solidarity between the generations is extremely important, but there are dark clouds around the private health insurance market at this time. The pool of people paying is getting smaller and we now have historic deficits that are being carried over to the next generation of people, who will have to pay. The VHI apparently needs €80 million to €90 million in order to meet its EU requirements into the future. These are deficits that were built up when there were 100,000 to 150,000 more people paying for private health insurance in this country but they are no longer doing so.

A smaller pool of patients who are less able to pay private health insurance are now being landed with this burden. In order to continue intergenerational solidarity and to encourage younger people to accept that they will have to pay a little more to provide private health insurance to older generations, they must have full confidence that we are doing everything in our power to keep costs down. What Deputy O’Reilly said is true and it must be considered and dealt with urgently by the Minister.

One of my concerns about the legislation is the addition of health status to the criteria for risk equalisation. Perhaps there is a reason for that connected with the ruling or it might be in order to get around European Union regulations but, whatever the reason, it must be fully explained to the House because it could complicate the issue in the future unless a clear protocol is set out for how one defines ill-health. If the definition is based on the number of nights one stays in hospital, we are running the risk of a return to the problems experienced in the private health insurance market in the past, when private patients were kept in hospital for longer than was necessary because hospitals and consultants were paid per bed night. There is a need to examine how we will deal with this issue.

Simplicity should be the order of the day when it comes to private health insurance in terms of how we monitor costs and premiums and how we sell the concept of intergenerational solidarity and community rating. It is surprising in some respects that 40% of the population feel compelled to have private health insurance. It is an indictment of the health care system. When the VHI was set up in the 1950s it was because people with a certain income had to pay for all of their health care needs as there was no universal free health care service. Currently, the private health system is different. Essentially, everyone is entitled to access to public hospitals. Although there may be a charge, one would not be driven to bankruptcy if one ended up in hospital, whereas 50 years ago one had to pay for every single hospital procedure or operation at significant cost, which did break people in the past. We must also drive forward reform and efficiencies in the public service. We must reduce waiting times and ensure procedures are carried out at an appropriate time because the only reason the vast majority of people pay for private health insurance is to get access to health services.

We must also examine the type of company the VHI is. The judgment from the European Union states that the VHI and other such companies must have reserves of 40%. Other companies do but the VHI does not. We must examine the position seriously. Health insurance is not like house insurance, which is affected by factors such as storm damage and must plan for an unpredictable future. For instance, costs increase dramatically for an insurance company following a major storm, but in the case of health insurance the VHI could calculate to within a couple of million euro the health insurance costs for the next two to three years. We could factor in a 6% to 7% increase in health costs. The VHI will more or less be aware of the procedures involved. A 40% reserve is probably too much. If the VHI were involved only in health insurance the reserve could be much lower. I wonder whether the possibility has been explored by the Minister at European level because it would reduce the considerable amount the VHI is expected to keep in reserve. It is the patients of today and tomorrow who will have to pay higher premiums to fund the reserve. There is an opportunity to do things differently in order to continue to make private health insurance more affordable for patients.

I was involved in the discussion about risk equalisation. BUPA originally took the court case to Europe in which risk equalisation was struck out and, as a result, there has been much confusion in the private health insurance market in recent years. That is one of the reasons I wish to ensure that when we introduce legislation on the issue we aim for simplicity so that the legislation is not open to future challenge. I am a strong believer in community rating and risk equalisation. The other system of private health care is a risk-rated one, whereby as one gets older one pays a bigger premium. That is completely unacceptable because as people get older their incomes decrease, their premiums go through the roof and they cannot continue to pay for private health insurance. The risk-rated model of private health care is a complete rip-off and does nothing for patients. We must work hard to ensure that the model of private health insurance we have is affordable and accessible to as many people as possible.

Because of their financial situations, young people are leaving it as long as possible to take out private health insurance. The longer they leave it, the greater the proportion of older people in the market, which will put more pressure on the community rating model we have in place. It is vitally important that the Minister consider the need to examine the cost base. We talk a great deal about the cost of premiums, but insurance companies take the cost and add a little on top of it to obtain the premium. There is great scope for us to examine the cost base of private health insurance by focusing not just on consultants and how hospitals bill private insurance companies but on how hospitals calculate bills. In this way we can dramatically reduce the cost of premiums to patients. Otherwise, I predict a serious crisis in the health insurance market in the near future because premiums simply will not be affordable for young people and older people will be left without cover. There is a role for the private health insurance market in this country. We could not afford to deal with all of the patients who are treated in private hospitals currently in the public system. It would crash the system. The public system is already under huge pressure. We must acknowledge the good work that is done in private hospitals.

Deputy Mattie McGrath was all over the place in referring to the elite in one breath and then saying in the next that those in the Royal College of Surgeons in Ireland are a fine bunch of lads and that they are not the elite at all. One wonders what point he is making. He criticised HIQA. We set up HIQA because we did not like what was happening in the health service, with cases such as the Susie Long case, the abuse of elderly people in nursing homes and the regrettable incident in Galway in recent days. I do not wish to comment too much on the latter case until we have the full facts of what happened in Galway. The purpose of HIQA is to give confidence to people that the health service is safe and that it exists to work for them. We must be supportive of such organisations rather than undermining them. We might not always be happy with how they operate but they are there to look after patients, which is our number one concern. I hope that what we say about the cost base of private health insurance is taken on board and that something is done about it.

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