James Reilly (Dublin North, Fine Gael) | Oireachtas source

There was much debate about this several weeks ago. The scheme is effective to the point that it compensates for 78% of those over the age of 70 and 85% for those over 80, rates which were 73% and 82% respectively last year. The plan is to get it to a rate of 90% in terms of its effectiveness in compensating insurers who have older people on their books.

Let us call a spade a spade. If there were great unfairness or overcompensation, we would not see the disparity between the VHI with such a high preponderance of older clients as opposed to the other players in the market. There is a concern that insurers will try to segment the market by bringing in new products. For example, VHI took off cataracts, knee and hip replacement procedures from its plan B which was aimed at dissuading older people from buying the policy. There are nearly 270 different insurance policies available which is set to confuse consumers. The Health Insurance Authority, HIA, will be beefed up considerably to deal with these issues in the market place. The risk equalisation scheme is the mechanism the Government uses to ensure a level playing field in the market.

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