James Reilly (Dublin North, Fine Gael) | Oireachtas source

On 28 January I met with the top management of the VHI. It informed me of its intention to increase premiums by 8% having previously communicated an 11% increase. I told it in the strongest possible terms that this was not acceptable to me. It has since announced that the premium increase will now be 6%. However, I remain very concerned about the cost of health insurance and have requested the VHI to submit a detailed cost containment plan, which is in preparation, with clear targets and timelines under each heading so as to minimise the need for any future premium increases.

I have repeatedly raised the issue of the cost of private health insurance with insurers and am determined to address costs in the sector in the interests of consumers. Last year, I established the Health Insurance Consultative Forum which comprises representatives from the country's main health insurance companies, the Health Insurance Authority (HIA) and my Department. This forum was established to generate ideas which would help address health insurance costs, whilst always respecting the requirements of competition law. I have made it clear to the health insurers that I believe significant savings can be made, the effect of which can be to contain the cost of health insurance premiums. Given the VHI’s very significant share of overall costs in the market, I will continue to focus strongly on the need for the VHI to address its costs and to address aggressively the base cost of procedures, including professional fees.

The programme for Government commitment to put a permanent scheme of risk equalisation in place in the private health insurance market has been achieved following the passing, in December 2012, of the Health Insurance (Amendment) Act 2012. The new risk equalisation scheme came into effect from 1 January, 2013 when it replaced the previous interim scheme. This is a key requirement for the existing private health insurance market and is designed to keep health insurance affordable for older persons, to maintain the stability of the market and to contribute to the protection of affordability for those who need it most.

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