Carol Nolan (Laois-Offaly, Independent) | Oireachtas source

I am pleased to speak briefly on this very important issue. This Bill seeks to provide a risk equalisation mechanism for ongoing sustainability of the private health insurance market, while maintaining health insurance policies at an affordable price. It will also provide for a reduction in stamp duty levies on advanced health insurance contracts, which will decrease from 2021 to €406. That is a decrease of €43. Non-advanced contracts will decrease from 2021 to €122, which is a decrease of €35. This is a welcome but belated action. It is partial recognition that prices for health insurance are simply astronomical and out of the reach of many people, especially those with chronic or long-term health conditions or large families.

I note section 4 of the Bill amends section 7F of the principal Act to deal with the benchmark for "reasonable profit". This section is being amended for the purposes of assessing whether an insurer has been overcompensated by the scheme. That is one of the key issues of this entire debate which we must address. What exactly is it that determines a reasonable profit and how far may a health insurance go in settling costs? Clearly, it is the case that in this area, just as with motor vehicle or business insurance, we have a sector that is not always as transparent or open to public scrutiny as it should be. We have all seen how insurers have responded to Covid and, indeed, the forced closure of small and medium enterprises, SMEs, and local traders. It took High Court action to challenge the insurance sector to make good on policies people had paid into for a long time. That should not have happened. I raised this issue in the House on behalf of businesses. Insurers should have been fairer and more reasonable.

Some years ago, the European Commission informed Insurance Ireland, the association of Irish insurers, of its preliminary view that the association breached EU antitrust rules by restricting competition in the Irish motor vehicle insurance market. Many people have the sense that there is a similar level of market restriction with health insurance.

The Government's position is our community-rated health insurance market means the cost of health insurance is shared across all members of the market and that in general, with certain exemptions, everyone can buy the same policy at the same price and insurers cannot alter their prices based on an individual's current or potential health status. This is a regulatory version of wishful thinking. In the consultation conducted by the Health Insurance Authority in January, found that:

It is widely recognised that in a community rated market without a robust [risk equalisation scheme] RES, insurers with lower risk profiles will tend to be more profitable, all else being equal. As a result, in the absence of a robust RES, insurers will be incentivised to do the following:

- Design products so that they are not attractive to older and less healthy customers ... [which, as we know is called risk selection]; and

- Segment their customer base by age / health status so that older and less healthy people pay more for insurance (market segmentation).

We need to ensure insurers are not allowed engage in such practices and that all people who want it can afford a different level of comprehensive health insurance. It is a matter of ensuring fairness for everybody and that everybody who needs and wants health insurance can avail of it in a fair and just manner.

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