Finian McGrath (Dublin Bay North, Independent) | Oireachtas source

I thank the Deputy for raising this very important issue. I am aware of the particular case he mentioned.

The charges that apply in a private hospital are the subject of negotiation between the health insurers and the health service providers. The rates for particular procedures are the subject of agreement between insurers and medical consultants, while the rates that apply for accommodation and other services in private hospitals are agreed between health insurers and each individual private hospital. Since health insurers can negotiate with private hospitals and with consultants, it is in the insurers’ interest to negotiate the best possible rate they can for procedures and services for their customers, as this will control their claims costs.

This is in contrast with the public hospital setting, where under the Health (Amendment) Act 2013 a per diemcharge applies when a patient is admitted to hospital and the patient opts to be treated on a private basis. Health insurers cannot negotiate with the HSE and the rates are set by legislation. There is an objective in setting such charges from public hospitals to reduce the subsidy to private practice, including the changes that were made following the 2010 Comptroller and Auditor General report. It should be noted that in recent years there has been no increase in private charges by public hospitals, notwithstanding the significant increase in costs, including salaries.

My colleague the Minister for Health has no role in the commercial decisions of any health insurer, and has no role in the charges for accommodation and other services that apply in any private hospital. It is neither possible nor appropriate to comment on individual procedures without knowing the full circumstances and clinical decisions involved.

In general terms, care provided in a hospital setting will always be more expensive than care provided in a community setting and surgical procedures are considerably more expensive than medical procedures.

I note that there was a 1% decrease in claims paid by insurers last year, primarily because of a drop in insurance claims paid to public hospitals.

Significantly, from the perspective of the individual patient, it should be noted that in our community-rated health insurance market, an individual’s premium will not be affected by his or her own claims history. By law, insurers are not allowed to charge an individual a higher premium based on any of the individual’s personal circumstances. Instead, the premium for a health insurance plan is set at a rate where insurers will cover the expected claims costs that will arise based on the coverage received by their customers who are availing of that plan.

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Our community-rated private health insurance market is underpinned by a risk equalisation scheme. The scheme involves a community rating levy collected by the Revenue Commissioners from insurers in respect of all policies written. All of the moneys collected are paid over to the risk equalisation fund administered by the independent regulator, the Health Insurance Authority, HIA. The authority then redistributes the fund back to the market through credits payable to insurers in respect of insured lives to offset some of the additional cost of insuring older and less healthy members. The scheme is Exchequer neutral, with neither a cost nor a benefit to the State.

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