Tom Fleming (Kerry South, Independent) | Oireachtas source

The current statistic indicates that more than 200 people per day are abandoning their health insurance policies. It is a frightening scenario when thousands of people with private health insurance are experiencing dramatic increases in 2013 with further increases of anything between 20% and 40% envisaged. More than 300,000 health insurance customers on the cheapest plans are to lose full cover for procedures in private hospitals from April onwards. In order to comply with the terms of the Government’s new risk equalisation scheme, the cheaper plans will no longer be able to offer cover of more than 60% of the cost of day care procedures in a private hospital.

The Minister’s target is to raise an extra €60 million this year by charging all private patients in public hospitals based on a charge of €1,000 a night for a private bed compared to a cost of €75 for a public bed. To put it mildly, that is puzzling. It is hard to fathom the vast difference in pricing. Alarming figures are being bandied about regarding costs for some procedures being carried out through insurance cover. Some operations require just an overnight stay in a private hospital and costs of between €1,000 and €3,000 have been mentioned. Blatant overcharging is pushing up premiums. That is a significant factor in the spiralling cost of premiums.

In 2011, the VHI revealed that more than 30 hospital consultants received more than €500,000 each from it. One consultant on the VHI earning list for his private practice, who was also on the list of a number of other health insurance companies, earned more than €1 million. A lot of question marks hang over the VHI. In 2005, it had 1.7 million customers. Now it is down to 1.2 million, yet its number of employees has increased in a steady manner since 2005. The VHI cost base is mainly due to abnormally high remuneration and increment rate. That seems to be the root cause of its insolvency. At this stage the taxpayer might be burdened by the European Court of Justice ruling that this country is in breach of its EU obligations by the exemption of the VHI from regulation by the Central Bank. The VHI has been allowed to mismanage its affairs. It has been propped up. The Minister will have to urgently intervene and call a halt to the anomaly where competitors are subsidising the company for far too long. If it is left unchecked it is heading for an increasingly expensive health insurance premium and it will accelerate rapidly the thousands opting out who are further pressurised with stretched household budgets to keep up with rising costs.

See this speech in context