Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute to this important debate tonight on the spiralling cost of private health insurance. I commend my party colleague Deputy Billy Kelleher on tabling the motion. The high cost of health insurance is having a devastating and detrimental effect on households across the country. It affects both young and old, despite the commitment in the programme for Government that the Government would act speedily to reduce the cost of the delivery of both public and private health care. This simply has not occurred and circumstances have continued to deteriorate during the tenure of the Minister, Deputy Reilly, in the Department of Health.

The statistics are stark and cannot be defended by the Government. According to the Health Insurance Authority, 2,099,000 people had inpatient health insurance plans at the end of December 2012. This represents a reduction of 64,000 policyholders in 2012. This followed a reduction of 65,000 people in 2011. According to the CSO data from April 2012, the percentage of the population with inpatient insurance has fallen from a peak of 50.9% in 2008 to 45.8%. These alarming statistics are compounded further by the staggering lack of progress of the Minister for Health on his trophy policy, the introduction of universal health insurance.

When the Minister had an opportunity to support the measure that would have extended free general practitioner care to all newborn children in 2013, as outlined in Fianna Fáil's pre-budget submission, A Fairer Way to Recovery, he declined it. This policy would have gone some way towards meeting the Government's long-delayed commitment to providing free general practitioner care. This was a missed opportunity.

The number of policyholders with private health insurance is falling continually. A more worrying trend concerns the high proportion of young people and families who have been priced out of the market and who have abandoned their health insurance cover. This is the core demographic that health insurance providers should be targeting to ensure their own sustainability and the very future of the industry. For the period 2008 to 2011, the number of those over 50 with inpatient health insurance increased by a further 50,000, while the number of policies for those under 50 fell by 122,000. The main reason is that young people and families, who have suffered greatly in the recession, can no longer afford to purchase health insurance. The four insurance providers operating in the market, VHI, Laya, Aviva and GloHealth, have all increased the costs of their policies over the period such that there has been a never-ending series of price hikes. For example, GloHealth, which has been in the market for only less than a year, increased the premiums for its core plans, outpatient-only plans and cash plans on 30 January and 2 February this year.

Young people with families have been left with two choices, that is, to give up health insurance entirely or downgrade their health insurance cover. The knock-on effects have resulted in health insurers increasing their prices for loyal customers to cover the gap, in effect pricing a second group out of the market. Despite this, the Minister for Health seems unconcerned and indifferent to this growing crisis. How can consumers realistically shop around when the four insurers in the market continually hike their prices? This position is simply untenable and the Minister will have to intervene. The lack of concern shown by the Minister is in sharp contrast with the criticisms he levelled at the former Government in 2011 over the then price increase. He spoke of the last straw for struggling families and claimed it would lead to increased demand on the public hospital system. Now, when the Minister has an opportunity to do something, he does not even consider the proposal that his Department research the impact of patients who have previously held private health insurance presenting in public hospitals.

This is not the first time that we have seen evidence of the Minister's dramatic transformation from his time in opposition to when he entered government. The concern remains but inaction is the adopted policy approach. A policy of "wait and see" is simply not good enough from the Minister for Health. Instead of stopping the haemorrhaging of consumers from the health insurance market, the trend has actually accelerated during the Government's term of office.

This trend can be reversed if the Minister for Health takes on board a number of recommendations. First, he needs to protect the 330,000 health insurance customers with lower levels of cover from another increase in the Government's health insurance levy in March. He needs to renew his commitment to adopt a two-tier levy system for those with advanced and non-advanced cover. The Health Insurance Authority, having examined the Health Insurance (Amendment) Act 2012, has classified all of the plans on the market as not conforming to the Minister's definition of "non-advanced". As a result, all policies are now categorised as advanced and subject to the higher rate of levy. The Minister needs to revisit urgently and revise the legal definition of a non-advanced plan. If the current situation is not rectified, an individual paying €500 for a lower-level plan, a very basic plan, will pay the same levy as someone who can afford to pay €4,000 for a Rolls-Royce plan. This raises fundamental questions with regard to equity and fairness since those on lower levels of cover are being asked to subsidise those with higher level health insurance policies.

The Government needs to defer the increase in the health levy due at the end of March until a new definition for non-advanced plans is agreed. The health insurance levy has already increased by nearly 80% since its introduction four years ago. The CSO reports that health insurance premiums have risen by 60% over the same period.

Children should be removed from the health levy criteria as a matter of priority. Young families who are hard pressed during this recession need a break. Intergenerational solidarity should be confined to those of 18 years and over. Only last year the referendum on children was passed to strengthen children's rights in the Constitution. How is it fair or equitable for the Government to expect children to support older and single people's health insurance costs through paying this levy? Simply put, the levy on children needs to be abolished urgently.

The Government needs to tackle the VHI and how it operates. The Government, as its senior shareholder, has an important say in how it operates. In 2005, the VHI had 1.7 million customers; today, the figure is 1.2 million, yet the number of staff has increased. If it were a private company, it would have gone bust.

The Government needs to ensure that patients who have private health insurance and pay their taxes do not lose their universal entitlement to public health care funded by the State. Increased public hospital charges, including the proposed additional hospital bed charge, and their impact on the cost of private health insurance need to be addressed. If the Government ignores the concerns of the insurers and the industry, it will, in effect, undermine the sustainability of the health insurance market.

The phased introduction of lifetime community rating ought to be considered. Such a move could be used to encourage younger people to purchase health insurance.

The prohibition on insurers negotiating with public hospitals must be lifted. At present insurers can only negotiate a package price with private hospitals. There is also a discrepancy between the five days and seven days in private and public hospitals, respectively, in the length of stay for VHI customers, which must be addressed.

Surely greater savings could be achieved if insurers could negotiate with public hospitals? As a means of lowering costs in the industry, insurers must work together, with the support of the Department of Health, to develop industry standard clinical pathways. Such a move would lead to the delivery of quality health care to customers in the most efficient manner.

This Government and the Minister for Health need to address the issues set out urgently to ensure the sustainability of private health insurance market in this country. The people deserve better than the level of incompetence evident in the Department of Health and displayed by this Minister.

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