Denis Naughten (Roscommon-South Leitrim, Independent) | Oireachtas source

I move amendment No. 2:

In page 4, between lines 2 and 3, to insert the following:“4. Section 7A of the Principal Act is amended—

(a) in subsection (6), by deleting “may by regulation” and substituting “shall introduce by 1 January 2015 regulations which shall”, and

(b) in subsection (7), by deleting “Regulations under subsection (6) may” and substituting “Regulations under subsection (6) shall, inter alia,”.”.

The purpose of this amendment is to introduce a measure that this House passed in 2001, lifetime community rating. Its objective is to act as an incentive to encourage people to take out health insurance earlier in life. While many young families are leaving the health insurance system, there is bizarrely a 7% increase in over-50s in the system. A significant number of young people, particularly young families have dropped out of the system. They are the ones under huge financial pressure. It disguises the scale of the problem within the health insurance system.

I am scared because the Minister for Finance has defended the changes he introduced in respect of tax credits on the basis that only 7.5% of people have cancelled their health insurance. This is a complete underestimation of the situation because people over 50 are joining for the first time. It is not right that someone who is 65 years of age, who has paid into their health insurance system for 40 years now faces significant increases in the cost of health insurance on 1 January while someone who is joining for the first time pays the exact same rate for that policy. Every one of the four health insurers, including the Health Insurance Authority has given evidence at Oireachtas committees and has stated categorically that the one single step that could make a direct impact on the cost of health insurance would be the enactment of that 2001 provision for lifetime community rating.

If we fail to introduce lifetime community rating there will be a significant problem in the new year in respect of health insurance. People will leave the system but on top of that we are seeing a very dangerous trend, which started earlier this year when Laya and Aviva introduced a measure whereby they excluded several public hospitals from health insurance cover. Six of these plans were launched earlier this year. From January that number will be more than doubled. People will not only have to consider the level of cover they are purchasing, but to see whether the cover includes their local hospital. Geographic discrimination should not be built in to our health insurance system but that is happening. From the beginning of the year, approximately 20 health insurance plans will have built-in geographic discrimination and people will not be able to get treatment in their local hospital. That is a worrying trend.

The reduction in tax relief will cost people who have private health insurance an extra €170 million per annum. In addition, €130 million will have to be paid for public hospital beds following the introduction of legislation this year. Is it fair that people in their 60s taking out insurance for the first time pay the same rate as those who have been in the system for 40 years?

That is a key question Changing that provision would encourage younger people to take out health insurance for the first time. The argument that will be made by the Minister of State is that if we are going to introduce universal health insurance in a couple of years, then there is no incentive to do this.

The difficulty is that we now have a sizeable cohort of people, which is getting bigger by the day, who do not have private health insurance and are not eligible for a medical card. This happens for two reasons, first, because the price of health insurance has increased significantly but also, at the other end, the number of those entitled to medical cards is decreasing annually due to the thresholds. Moreover, I am not just talking about the over 70s medical card because, as we know, there has been a significant reduction in recent years in regard to the thresholds for the standard medical card as it has not been linked to increases in social welfare. This means someone who has an income which is €1 over the social welfare level is not entitled under the income thresholds to a medical card. Therefore, at both ends of the system, we are taking people out of cover.

This leaves a greater cohort of people, some 7% of the population at present, who do not have any cover, whether by way of medical card or private health insurance, and this figure will probably go over the 10% mark next year. This makes the introduction of universal health insurance far more difficult. The Dutch system, on which ours is being modelled, was based on near universal coverage before universal health insurance was introduced, so Dutch people had some form of private health insurance up to that point. Not only are we undermining the current private health insurance system and putting additional pressure on the public hospital system, we are also undermining the objective of Government to introduce universal health insurance.

I have no doubt that, unless something drastic is done quickly, we will see private hospitals in particular locations, not just in Dublin, close next year. This will remove options for people and remove services from particular regions, which will put hardship not only on people who have private health insurance but also on those who rely on the services of the private hospitals but who are within the public system.

I urge the Minister to State to look again at this provision. I have put down a fair amendment in that I am seeking a period of 12 months to have this up and running, and I am not looking for it to be changed overnight. I ask the Minister of State to seriously consider the amendment.

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