Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

I am grateful for the opportunity to speak on this motion. For the past two years, this Government has consistently striven to ensure that the cost of private health insurance for ordinary families in Ireland is kept down and our efforts in this regard will have to continue for the months and years ahead. It is a complex issue involving competition in the market place, the base cost of procedures and the pay of the professionals involved. Undoubtedly, there have been significant price rises in recent years and this, coupled with declining household incomes in many cases, has seen many families forced to opt out of private health insurance, placing an even greater burden on the public system. However, over 45% of the population is currently covered by private health insurance, greatly alleviating the burden on the public health system.

In terms of the drive to reduce costs, there have been some notable successes. The VHI, for example, has achieved cost savings of over €300 million by reducing consultants' fees and payments for procedures such as inserting stents and MRI scans. This cost-saving drive has also resulted in a large increase in the number of day-case procedures and the average length of stay in hospital has also been decreasing.

Competition is a key factor in today's private health insurance market and while there are four main players in the market, GloHealth only has 1% of the market, Aviva, 16.9% and Laya Healthcare, 21.5%, meaning that the market is dominated by the VHI, with over 56% market share. There are pitfalls to having such a large segment of the market as many older people have never switched providers and thus, while VHI has 56% of the customers, it has 67% of the claims. By offering inducements to adults with small children, companies are targeting young professionals in their 30s and 40s, ensuring their products are most attractive to people whose needs are least in terms of health procedures.

One aspect of the payment structure which has received much focus is community rating but this inter-generational solidarity is necessary is to prevent our health service, both public and private, from crumbling. There is little incentive to pay a large health insurance premium during the years that one is least likely to have to avail of it, only to be pushed out by the private system as one ages. Without community rating, very few older people would be able to avail of private health insurance and the huge pressure on orthopaedic and neurology departments, for example, all across the country would soar. The Health Insurance Authority has, in recent years, been highlighting the ease with which people can switch providers and has matched its ambitions with actions in terms of a very user-friendly plan-comparison tool allowing individuals and families to assess which plans best suit their needs and what savings can be made. That tool is something which I would encourage everyone to use before renewing their health insurance.

I believe the risk equalisation measure currently in place in Ireland has forced private health insurers to seek greater efficiencies rather than cherry-picking the best and healthiest customers, creating the leanest regime possible in terms of administration.

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