Dáil debates
Wednesday, 12 January 2011
Adjournment Debate
Private Health Insurance
2:30 pm
Pat Breen (Clare, Fine Gael)
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I thank the Ceann Comhairle for allowing me the opportunity to raise this important matter. The announcement by the VHI of an increase in premia of between 15% and 45% from 1 February is a major blow to many families who are already struggling to cope in this recession. It has struck great fear into elderly people, many of whom are covered under the company's plan B and plan B Options schemes. Their premia are set to rise by â¬317 and â¬444 euro, respectively, for a single adult.
I am disappointed the Minister for Health and Children is not in the Chamber to address this issue. She is never there when she is wanted. How can elderly people be expected to afford these additional payments? Older people have worked hard throughout their lives and have paid their VHI premia for decades so that they could enjoy a good quality of life in their latter years. Now they face the prospect of having to cancel their insurance.
Middle Ireland has been dealt a series of hammer blows by the Government, particularly by way of the austerity measures introduced in last December's budget. Huge financial pressures have been heaped on middle-income families. More than 70,000 people cancelled their private health insurance last year and these latest price hikes will drive more people into a public health system which is already in crisis. In recent weeks an unprecedented number of patients have been left for days on trolleys in our crowded accident and emergency departments.
Fine Gael proposes the introduction of a universal health insurance scheme that would end the two-tier system. In the meantime, the drive away from health insurance will result in even longer waiting times on trolleys, more crowded accident and emergency departments and longer waiting lists.
The VHI argues the hikes are necessary because it is losing â¬850 for each of its 129,000 customers who are over 70. Two years after the Government's risk equalisation scheme was shot down by the Supreme Court, the Government has failed to act. The Minister for Health and Children claimed the introduction of levies and tax credits would obviate the necessity for price hikes but the policy has quite simply failed. Will the Minister of State clarify the position tonight? When will the risk equalisation legislation come before the House? Our health spokesperson, Deputy Reilly, has called on the Minister to publish the Milliman report into the VHI's costs. I support the Deputy in that regard.
My constituency office has been inundated with calls from concerned constituents since the price hike was announced. Several people have questioned the cost of hospital care and have asked whether the VHI is too quick to sign off on bills. For example, a man told me yesterday he received a bill for three nights after having spent one night in hospital. The VHI paid the bill without questioning it. Other people are simply astonished and angry. On the very day we heard the VHI chief executive announce the price hikes, he refused to state whether his salary was cut. According to the VHI's annual report of 2009, his pay was approximately â¬410,000. I will be very interested to hear what he has to say when he appears before the Joint Committee on Health and Children later this month. Surely it is time the Government led by example by capping public sector salaries at â¬200,000 per annum.
Taxpayers are entitled to see the Milliman report. After all, they paid for it. It will show significant savings can be made and it should be published without delay. The Minister should make contact with the VHI. It must not be allowed to increase its charges while the report remains unpublished. VHI customers, particularly the elderly and middle-class families, are facing weeks of sleepless nights worrying about their health care. If the Minister does not act, it will be another major blow for families.
The reality is that the buck stops with the Minister for Health and Children. I am disappointed she is not present in the House to answer questions on this issue of real concern for members of the VHI.
Seán Connick (Wexford, Fianna Fail)
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I thank Deputy Breen for raising this matter today as it provides an opportunity to outline to the House the responsibilities of the Minister for Health and Children, the current position of the private health insurance market and the Government's actions and plans for reform.
The Minister for Health and Children has responsibility for governance matters relating to the VHI, such as board appointments, the receipt of its annual report and accounts and other matters. VHI, while owned by the State, is a not-for-profit company operating in a competitive market. It would be inappropriate for any Minister to interfere in matters relating to prices set by any one company which is required to compete fairly within that market.
The VHI announced price changes in regard to a range of its plans on 6 January 2011, which will take effect on 1 February 2011. The increases will amount to 15% for more than half of its customers, with higher increases up to a maximum of 45% for those on other plans. While the Minister is conscious of the likely impact on customers in the current economic climate, a key principle of the market is the right of customers, guaranteed in law, to switch between or within insurers to get better value. This includes switching to a different plan with their own insurer or another insurer to get better cover or to reduce premium costs. This rule applies regardless of the age or health profile of any individual consumer.
Health insurance customers can switch easily, without having to serve additional waiting times and cannot be refused by another insurer. Provisions have been included in relevant health insurance legislation to ensure that switching is as easy and seamless as possible for customers.
The Health Insurance Authority, as the regulator of the private health insurance market, can offer independent advice to consumers in regard to their rights. The authority's website, www.hia.ie, contains a wealth of information for the benefit of consumers. It can be contacted by telephone at 1850 929 166.
It is important that the other insurers in the market, which have on many occasions indicated to the Minister their willingness to take on all customers, now take the initiative and offer plans to older persons that will attract them to move between insurers. In this way, the market could begin to move towards a more equal sharing of older customers between insurers and we could see competition driving efficiencies in services provided. This would also have the effect of reducing payments from the two smaller insurers to the VHI under the interim risk equalisation measures.
In May 2010, a comprehensive package of measures was announced by the Government to address a number of issues in the health insurance market. With regard to the VHI, advisers will be appointed next month to prepare for the capitalisation, authorisation and sale of the company. New minimum benefit regulations will be prepared on foot of the Health Insurance Authority's consultation on the matter, and other measures, such as the introduction of incentives for younger people to enter the market earlier, are also planned.
Following a Supreme Court ruling in July 2008 which struck down the 2003 risk equalisation scheme, the Government acted quickly to introduce an interim scheme of loss compensation. The scheme covers the period 2009 to early 2012, by means of a temporary scheme of age-related tax credits and community rating levy. The scheme is designed to be Exchequer-neutral over the course of the three-year period and ensures that a very significant degree of support for the cost of health insurance claims is provided. This scheme has been approved by the European Commission and is in place since 1 January 2009. Preparations are ongoing for a permanent, robust risk equalisation scheme which will come into effect at the start of 2013.
The Government is fully committed to continuing the community-rated health insurance market and it is the Minister's firm conviction that the preparations currently in train will act to preserve that principle.