Brendan Smith (Cavan-Monaghan, Fianna Fail) | Oireachtas source

I welcome the opportunity to make a contribution on this important motion put down by our party spokesman last night. It deals directly with the widespread concerns of many families throughout the country who are struggling to maintain their private health insurance. The dramatic reduction in the number of people paying this insurance must be a cause of serious concern in overall health provision and the additional funding pressures that will ensue for the health sector in general. The drop of 64,000 policy holders in the last year demonstrates a dramatic loss of revenue and, according to the Health Insurance Authority, the people leaving the market are younger and healthier and those with young families. A few years ago, younger people taking out policies were growing that insurance market, a welcome development. By definition, those younger people joining the market were of significant value to community rating, which is of critical importance for an ageing population. Community rating must be protected.

Now we have a market in decline, losing people who should be the lifeblood to ensure sustainability for community rating. The younger policy holders, who are healthier by definition, are a critical ingredient in ensuring we have a sustainable community rated market.

As a society, we need to provide protection for older persons and those in ill or failing health. We must have that critical cohort of younger policy holders to ensure that necessary protection and we will not have those younger policy holders unless that age group finds health insurance attractive in its benefits and, most important, affordable. A continuing decline in younger policy holders would be detrimental to the health insurance sector.

The increase in private health insurance premia is well ahead, not only of inflation generally but of health sector inflation as well. I referred earlier to the large numbers leaving the insurance market. Allied to lower numbers is the fact that large numbers have downgraded their level of cover. All these factors contribute in a negative and, unfortunately, significant way to the further upward pressure on premia for those remaining as policy holders.

My party's spokesman, in his motion and his contribution last night, put forward a number of proposals that need urgent consideration and, I would suggest, implementation by the Minister of State, Deputy Alex White, and his colleagues in the Department. The Minister, through VHI, must achieve a reduction in consultant fees. That is one of the issues that has always been with us and that the public constantly raises with us. It is understandable that this issue is still one that needs further resolution.

A 70% increase in two years for some VHI policies is putting a terrible burden on many households already under pressure. I understand that those policies hit with such a large increase are typically those held by older persons. The latest 6% increase in VHI premia is the fifth in over two years, and this has to be tackled before policies become totally unaffordable, except for the very well off. This trend of increasing cost is causing many individuals and families to question how long more they can afford to remain in the insurance market. Of course, the same concerns exist for the policy holders of the other three private insurers as well. Subscribers giving up or downgrading their policies continue to put further pressure at an accelerated rate on those remaining in the market. Young families are under constant pressure to meet household commitments and there is a strong case to remove the €95 per annum levy from children. Such a move would help to make insurance that bit more affordable for so many families.

The Minister, Deputy Reilly, in a newspaper interview in January, spoke of his concerns about VHI's cost base but less than two weeks later VHI announced a further 6% premium rise, the fifth increase in two years - a point that Deputy Buttimer might note.

Particular attention must be paid to VHI as it is the only beneficiary of a very substantial levy. That is understandable because it has the vast majority of older policy holders.

The Minister gave a clear commitment to protect 330,000 health insurance customers with lower levels of cover from a further increase in the Government's health insurance levy this month. Now that is not being implemented. This is another broken promise, one that was only made a few weeks ago during the course of the enactment of legislation here.

See this speech in context