Bernard Durkan (Kildare North, Fine Gael)
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10. To ask the Minister for Health the extent to which he and his Department has monitored private health insurance costs; if any particular reason has been identified for increases in such premiums; if he is satisfied that the principle of community rating continues to exist; if private health insurance costs increases have been associated with any particular section in the health service; if particular changes are envisaged which might go some way towards stabilising private health insurance costs in general; and if he will make a statement on the matter. [40056/13]

James Reilly (Dublin North, Fine Gael)
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I have consistently emphasised the vital need to address the rising cost of private health insurance and the necessity for all private health insurers to address their cost bases aggressively. Last year, I established the consultative forum on health insurance to generate ideas to address health insurance costs. During the summer, I appointed an independent chairperson, Mr. Pat McLoughlin, who will work with my Department and the insurers on a review process to give effect to real cost reductions in the private health insurance market. I want all insurers to address the base cost of their claims and to see all procedures provided in an appropriate and safe health care setting.

The Health Insurance Authority, the independent statutory regulator of the private health insurance market, recently provided my Department with information on claims costs in the private health insurance market. Almost €2 billion was paid in claims by private health insurers in 2012. Some 46% was paid to private hospitals, 27% to public hospitals, 20% to consultants and 7% mainly for outpatient benefits. The average claim per insured person increased by 12.6% per annum between 2008 and 2012, largely as a result of increased usage of hospital services, with insurers attributing premium increases to increased claims costs and ageing memberships. Clearly, increases of this magnitude are not sustainable.

Community rating is a fundamental cornerstone of the private health insurance system, but it is under pressure from the market segmentation strategies being used by insurers as they seek to minimise their risks by trying to enrol younger, healthier lives. The Government is committed to the principle of community rating and, in 2012, clearly demonstrated this by introducing a permanent scheme of risk equalisation. The new scheme, which took effect from January 2013, is an essential support to community rating, providing a cost subsidy from the young to the old and from the healthy to the less healthy. The continued participation of younger customers in the market is clearly important and is one of the issues that the consultative forum is actively considering.

Work on these issues is progressing and I welcome the positive engagement by the private health insurers in the process but we need more robust audits. We have started that process with the VHI. Indeed, a large private hospital in this country - I will not say where - needed to repay €5 million. Another case saw €7 million being returned by doctors.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister for his comprehensive reply. Concerns have been expressed by many of those who have faced gradually increasing health insurance premiums in recent years. In their heyday, they contributed equally and reliably to the system when it was less competitive and provided better value for money. They did so in an economic environment in which they often paid as much as 17% interest on their mortgages, etc. I reject the suggestion in some quarters of the market that they are now a burden on the system.

Will the Minister indicate whether comparisons have been made with the system operating in the adjoining jurisdiction? Have people been subjected to the same increases? If not, how can the situation of Irish consumers be improved?

James Reilly (Dublin North, Fine Gael)
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I am glad that the Deputy has raised this important issue. It is the third leg of the health stool - the Department, the HSE and the VHI - and is responsible for 80% of pay-outs. I am determined that we address the cost base. Why do we pay the same sort of money for a procedure that used to take two hours that now only takes 20 minutes? I discussed this matter with the VHI. After much pushing and shoving, it agreed to reduce the fee by as much as 20%. If there has been an 85% reduction in the time it takes, surely the reduction in the fee should be more than 20%. I intend to encourage the VHI to pursue these issues and to use clinical audits to challenge doctors about the necessity of the tests they are doing.

There have been double digit increases in health premiums in recent years, but we have kept the increase to 6% this year. Deputy Kelleher-----

Billy Kelleher (Cork North Central, Fianna Fail)
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Some 3% is the straw that broke the camel's back.

James Reilly (Dublin North, Fine Gael)
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-----is shaking his head. His Minister made a mess of the health service. I could tell the Deputy that I have been two and half years in the Department and that it takes longer to get things off the ground in health than in other Departments, but I will not, as that is what his leader, Deputy Martin, stated in 2002.

Michael McNamara (Clare, Labour)
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Hear, hear.

Billy Kelleher (Cork North Central, Fianna Fail)
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It is taking the Minister a long time, too.

Michael Kitt (Galway East, Fianna Fail)
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I hope that everyone enjoys the weekend. The Ballinasloe horse fair is taking place and everyone is welcome to attend.