James Bannon (Longford-Westmeath, Fine Gael) | Oireachtas source

I welcome the Minister for Health. The €6 million he gave for the new accident and emergency facility at the Midland Regional Hospital in Mullingar means work is progressing there in a very satisfactory manner. Another issue I have raised with him time and again is the development of step-down facilities at St. Joseph's hospital in Longford. It would take great pressure off the services at the Midland Regional Hospital if this were to happen. Hopefully, the Minister will have news on that in the not too distant future.

The Health Insurance (Amendment) Bill 2015 is important legislation as it seeks to ensure that our older citizens and people with illnesses can afford health insurance and are not discriminated against by insurance companies in favour of younger, healthier people. Throughout my time in the House, I have always found that the foremost theme associated with health care debates is equality. This Bill relates to equality of insurance.

Risk equalisation was introduced in Ireland as a way of levelling the playing field between younger and older health insurance customers. While there has been a long-running debate about the benefits and negatives of risk equalisation, I find that the pros heavily outweigh the cons. For example, without risk equalisation, there is no incentive for insurance providers to cover the needs of older or less healthy people. Indeed, like car insurance, premiums would be heavily risk-related on the age profile of consumers and no real equality would exist. Therefore, I find myself in full agreement with comments made by the Department of Health about risk equalisation. The Department is on the record as stating:

The risk equalisation system protects the right of older people to purchase health insurance at a reasonable rate. Without it, the competition in the market is distorted because insurers with a majority of senior citizens are at a significant disadvantage.

I came across an interesting statistic while researching this legislation. On 1 July 2015, there were 118,000 people with health insurance aged between 60 and 64. If this legislation is enacted, the age at which credits are payable will rise from 60 to 65. This will benefit insurers, like VHI, which have a much higher proportion of older customers than other insurers. Therefore, not only is this legislation about ensuring equality for the consumer, it is also about ensuring equality for the providers of insurance and creating a better market for both the consumer and the supplier.

The issue of stamp duty charges is another important aspect of this legislation. The reduction in stamp duty charges on non-advanced policies will make it cheaper for insurers to provide these products to customers.

The corresponding stamp duty levy will be reduced on products not providing advanced cover for an adult from €240 to €202, which is a reduction of €38. For a child, it stands at €80 and goes back down to €67, a reduction of €13. While this is to be warmly welcomed, it must be pointed out, as some Deputies have already, that the vast majority of people have advanced policies and these have only been adjusted by 1%. We can all agree that 1% is very unlikely to have an effect on the prices for insurers or consumers. I would like to see this particular area of the legislation being urgently addressed.

There are two further points I would like to make. The first concerns the reduction in the Health Insurance Authority levy. The levy is set to be reduced to a rate of just 0.01% of insurers' premium income for the years 2015 and 2016. This will result in savings for insurers of €2 million in both years. After that, the levy will be set at 0.09%, which is a substantial reduction on the current levels of 25%. Second, I wish to pay a special tribute to Mr. Pat McLoughlin, with whom I worked closely on the old Midland Health Board. He produced two reports on private health insurance. I remember reading his first report, which was published in the run up to Christmas 2013. This report outlined a scheme of life-time community rating and discounted rates for young adults. I am pleased to see these recommendations are being acted on by the Minister and I look forward to reading Mr. McLoughlin's second report, which has just been published.

I have touched on a few brief aspects of this legislation. As I stated at the outset, this Bill is all about equality, particularly for our older citizens. The major aim of the legislation is to make health insurance as affordable as possible, reducing the chance of a spike in premiums and ensuring that insurers who have a much higher proportion of older customers are also treated with fairness.

Now is the right time to try to take a new approach towards health insurance and we are doing so with the legislation before us. In addition, we are widening the scope by making it as equal as possible. The Minister and his officials are to be commended on this progressive and reforming legislation.

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