Mick Wallace (Wexford, Independent) | Oireachtas source

I do not profess to be an expert on the area of health. No doubt the Minister knows more about it than I do. I would like to understand it better. I am confused as to how the HSE works but, like most people, I see many problems.

The Bill proposes changes to the risk equalisation credits and to stamp duty. Seemingly, stamp duty will be increased on advanced policies. Advanced policies are held by 94% of privately insured persons, while non-advanced policies are not subject to this measure in the Bill - non-advanced policies have lower levels of cover, largely providing for public hospital cover. Stamp duty for most private insurance holders will increase by 12.5% on a child's policy, and by 14% on an adult's policy. The Minister, Deputy Reilly, has told health insurers that they must absorb this increase. Obviously we understand that this will be passed on to the consumer and increases in premiums will mean that more subscribers will leave the private health insurance system. Fewer subscribers in the system, in turn, means that costs for everybody else will go up, and will result in even more subscribers joining the public system. The concern is that this will put further pressure on the public system, which is already struggling owing to funding shortfalls and budget cuts. Age is also significant here, as the numbers of those leaving private health insurance - 61,000 in the past 12 months, which is a frightening figure - and in the overall reduction in the population who were privately insured, from 50.9% in 2008 to 44.8% in 2013, are highest for younger people. This drop-off in the number of younger people is not surprising given the financial pressures they are under, including reductions in income and increased unemployment, which is added to by underemployment and insecure employment. Risk and community rating work by levelling out costs between older and younger insurance customers, which means that younger people pay more and older people pay less than they would in a risk-rated system. The problem posed by a flight of younger people from private insurance is that it will be more difficult for the system to be sustainable.

The changes proposed in the Bill come on foot of budget 2014's capping of tax relief on health insurance premiums. Approximately half of all health insurance customers are affected by this, as the tax relief will now apply only to the first €1,000 spent on a policy for adults and the first €500 for children. Health insurers have noted that this reduction in tax relief will lead to people leaving the private health insurance system. The Government, however, has stated that the capping of tax relief and changes to stamp duty proposed in the Bill will lead to subscribers taking out different health insurance plans with lower levels of coverage.

The Government is introducing several changes to the health system through budget 2014, the Health (Alteration for Criteria for Eligibility) (No. 2) Bill 2013, and now this Bill. It is clear from each of these instruments that the primary objective is to save money and to cut spending. Although the Government has committed itself to the introduction of a universal health care system, including free GP care for all during the lifetime of this Government, it is hard to see how such policies will be realised if the reductions in spending are simultaneously implemented. While much has been made of the introduction of free GP care for those under five, our health system is being crippled by drastic cuts introduced since the onset of the economic crisis. A recent OECD report, Health at a Glance 2013, which I only read about today, highlights the fact that the countries bearing the brunt of the economic crisis have seen the most dramatic reductions in spending on health in recent years. Ireland's per capita health care spending has been reduced by 6.6% between 2009 and 2011. We saw a similar reduction in spending during the last recession in the 1980s, and some would say that the health system did not recover from that. Repeating the mistakes of the past is not only short-sighted but has dire consequences for the lives and well-being of the people of this country.

The Bill is another example of this dangerous and counterproductive approach adopted by Government. It introduces additional costs that will be passed on to the premiums of health insurance customers, regardless of the Minister's call for insurers to absorb costs. It will add to the growing number of subscribers leaving the private health insurance system, which will put increased pressure on our public system. The Government is increasing costs and cutting at both ends of the health system - it is more difficult for subscribers to remain in the private system with rising premiums, while at the same time the public system is overburdened, with those perhaps most in need of free medical care now being denied it through what the Government calls "medical card probity".

The Minister's request to insurance companies to absorb these extra costs and not pass them on to the customer is probably fanciful. That is not really how the private sector works. That is what worries me most about the Minister's liking for the Dutch system. I do not know whether Deputies have spoken about it already, but it seems as if the Dutch system is beginning to unravel. From what I understand of it, the system consists of a series of private companies supposedly providing competition, and those who cannot afford to pay for their own insurance are guaranteed a certain basic level by the Government. In Holland, the basic level is being eroded and less is being offered at that basic rate all the time because of increased costs. Seemingly, in a short space of time, the Dutch have seen their health insurance bill rise by around 40%.

One may call it a universal health insurance system but, given that the private sector has its paws on it, the Dutch State must find it difficult to guarantee that the system remains fair. From my own limited experience, the NHS in England, at least in its original form, offers a better template. It would give the Minister more control over the system.

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