Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank Deputies for their contributions to the debate and the broad support from most parties for the Bill.

I am concerned that some of those who spoke against the Bill and intend to vote against it have got the wrong end of the stick. They seem to suggest that the Bill is designed to support or subsidise the health insurance industry. That is not the case; the purpose of the Bill is to underpin community rating, which prevents health insurers from charging older people, people with poor health status or sicker people more than they charge anyone else. That is why I am somewhat confused over why people might oppose the Bill.

I can understand that some people who believe in a public-only system may wish to abolish health insurance altogether. I do not agree; I believe people should be allowed to spend their own money on their own health if they so wish, as we allow them to do in all sorts of other spheres.

A fully public system based on need and not ability to pay would still require some level of rationing. All health services have some level of rationing, some level of waiting lists or some level of exclusion criteria because certain interventions are not cost effective. Are we really suggesting to people that they must accept that they cannot use their own money on their own health? I do not agree with that. In a free society if people want to spend their money on their own health, their children's education or whatever, they should be allowed to do so. That is why I think the debate about a single-tier system versus a two-tier system misunderstands the reality of health care.

Even in countries with extensive and advanced national health services, for example, the United Kingdom, people still have health insurance, where 10% to 15% of people take out insurance through BUPA which allows them to skip queues, have the consultant of their choice or have their treatment in a private hospital. Unless we were to outlaw private medicine and outlaw health insurance then we need some sort of legislation to underpin it and regulate it.

The purpose of this legislation is to ensure that health insurers cannot discriminate against older people or people with poor health status. I would have thought that on that basis, those who purport to support equality and social justice should be supporting the Bill and not opposing it, unless it really is their contention that they wish to make it illegal for people to spend their own money on their own health should they so wish and to outlaw private medicine altogether. I am not aware of any democratic country that has ever done that.

The main purpose of the Bill is to specify the risk-equalisation credits and corresponding stamp duty levies, from 1 March 2016. The Bill will set credits for the 60 to 64 age group at zero, while increasing the credits payable for those aged over 65. The Bill also provides for an improvement in the health status measure under the scheme by expanding the setting in which a utilisation credit will be payable to include day-case admissions. This increases the support provided by the scheme to all less healthy insured people. In response to Deputy Mitchell, it does not affect the levy because the levy is set in law. It may affect premiums, which is a different thing. However, I do not think it should have a major impact on premiums given that it is a relatively small measure.

The introduction of a utilisation credit for all day-case admissions to hospital increases the support provided under the scheme for less healthy people of all ages. The credits provided are set at low enough levels to retain the incentive for insurers to minimise hospital stays where appropriate and to implement the most cost effective, clinically appropriate treatment pathways. The reduction in stamp duty for non-advanced contracts supports the provision of lower cost entry level products and will support the sustainability of the market. These changes, coupled with the ongoing increases in employment which is a key driver in the demand for health insurance, will support the market and everyone wishing to avail of private health insurance.

A particular issue was raised on overcompensation and profit. Overcompensation arises if an undertaking, a health insurer, that is a net beneficiary of the risk equalisation system makes a profit that exceeds a reasonable profit over a three-year period. Reasonable profit is defined as a return on equity not exceeding 12% per annum on a rolling three-year basis, using approved accounting standards and having regard to the European Union framework for state aid in the form of public service compensation.

The avoidance of overcompensation is a fundamental part of the risk-equalisation scheme. In recommending the level of credits to be provided to insurers, the Health Insurance Authority must have regard to the aim of avoiding overcompensation or excess profits. The authority is also required to assess whether the risk-equalisation scheme overcompensates any insurer. Once a year, by 1 May, insurers are required to provide the authority with profit and loss accounts and balance sheets in so far as they relate to Irish health insurance business.

The authority assesses if any insurer has been overcompensated by risk equalisation, enabling it to earn in excess of a reasonable profit. If the authority determines under the Health Insurance Acts that an insurer, which is a net beneficiary of the risk equalisation scheme, has been overcompensated, a draft report is issued to the insurer. The authority will then take account of any submissions received from that insurer before making a final determination on overcompensation. If the authority determines that overcompensation has occurred, it issues a report to the Minister and the insurer concerned stating the amount of the overcompensation. The insurer must then refund the amount of overcompensation to the risk equalisation fund. No overcompensation has occurred to date under the scheme. To the end of 2014, profit as a percentage of earned premium in the market is 3.3%.

I again thank the Deputies for their contributions and their broad support for the Bill.

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