Michael McGrath (Cork South Central, Fianna Fail)
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8. To ask the Minister for Health if he will provide an update on Government plans for the VHI; and if he will make a statement on the matter. [21256/14]

Seán Fleming (Laois-Offaly, Fianna Fail)
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57. To ask the Minister for Health his plans for the VHI; and if he will make a statement on the matter. [21262/14]

Michael McGrath (Cork South Central, Fianna Fail)
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This question is to ask the Minister for Health to provide an update on the Government's plans for the VHI. Essentially, the Minister should advise the House on whether the VHI has yet applied for Central Bank authorisation and if not, when that is expected to happen and whether direct Exchequer support will be required as part of the process.

James Reilly (Dublin North, Fine Gael)
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How long do we have left?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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While we have two minutes for this question, Deputy Durkan, who is sitting there patiently, has a question.

James Reilly (Dublin North, Fine Gael)
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Is Deputy Durkan lurking?

Bernard Durkan (Kildare North, Fine Gael)
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Yes, but without intent.

James Reilly (Dublin North, Fine Gael)
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I propose to take Questions Nos. 8 and 57 together.

The Government agreed in December 2011 to address the European Court of Justice ruling of September 2011 and to work with the VHI in its application process for authorisation by the Central Bank of Ireland, CBI, subject to further Government consideration of any application for authorisation.

Despite good progress, it was not possible to authorise the VHI before the deadline of 31 December 2013 and the European Commission was notified accordingly. The Government has committed itself to continuing the work towards authorising the VHI as soon as possible and agreed that a request be made to the European Commission to extend the deadline with a commitment to seek to have the VHI authorised by the end of 2014. The VHI board has committed to this approach and expects to make its application to the Central Bank in the near future.

Its readiness for authorisation will be determined by the Central Bank of Ireland after its assessment of the VHI's application. The VHI has indicated that it expects to be in a position to self-fund any capital requirements without recourse to Exchequer funds. Officials from my Department, the VHI and the Central Bank continue to engage regularly to progress the application and my officials are also in regular contact with the European Commission regarding the authorisation and related issues.

In short, the VHI will lodge its application on Friday. Moreover, it will do so without resort to any Government or Exchequer funds, which must be welcomed. I must commend the board and its chair on turning the VHI around over the past couple of years in this regard. I also have made it clear to the VHI that its focus, particularly this year when it is renewing contracts, also must be on bringing down the cost of private health care.

Billy Kelleher (Cork North Central, Fianna Fail)
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However, it has risen considerably.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for his reply and I welcome that the VHI's application for Central Bank authorisation is to be lodged at the end of this week, as well as the indication that no additional Exchequer support will be required. The question also concerned the broader future of the VHI and obviously, with universal health insurance looming on the horizon, what impact does the Minister currently envisage the introduction of universal health insurance will have on the VHI as the dominant provider of health insurance in the market? He should comment on this in respect of possible additional regulatory capital and the type of premia its customers will be obliged to pay for a certain baskets of services within the policies the VHI provides.

James Reilly (Dublin North, Fine Gael)
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I thank the Deputy opposite and I believe all Members will welcome this development. As for universal health insurance, it obviously broadens the market and offers all insurers opportunity within the market. The VHI, being the dominant player, has seen a reduction in its market share down to 57%. Nonetheless, it remains responsible for 80% of the payout and therefore has a huge role with regard to bring down the costs of private health care. I am on record in this House as often talking about the astonishing fact that up to now, there has been no clinical audit, that is, clinicians to challenge the treating clinicians as to why they perform the tests they carry out. There has not been enough robust audit but this has improved hugely and one private hospital was obliged to repay €5 million following some investigations. These audits now are ongoing but there must be examination of the cost base and the benchmarking as to why the amount being paid is paid. As I have mentioned previously, there are procedures that used to take two hours but for which, although they now only take 20 minutes, €800 still is being paid. This is utterly an acceptable to me. I believe one of the leading cost control experts from America will give a talk at the National Convention Centre tomorrow. The VHI, as well as many others, will be there and I look forward with interest to what he might have to say. However, the bottom line in this regard is the customer must be protected and the taxpayer must be protected from what has been a spiralling cost of private health care in which the costs simply have been transferred onto the taxpayers and the customers. This is not good enough.

Michael McGrath (Cork South Central, Fianna Fail)
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In response, I make the point that the policyholders have not been protected. They have not been protected by the Government, which slashed the tax relief people had enjoyed on their health insurance premia. Many people, particularly elderly people, have seen significant hikes in their health insurance premia directly because of Government decisions. While it is fine to blame it all on the VHI and on health professionals, the Minister's policy and decisions have contributed directly to a significant spike in the health insurance premia people have been obliged to pay.

James Reilly (Dublin North, Fine Gael)
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As his party's spokesperson on finance, I am sure the Deputy would be the very first person to castigate the Government, were it to continue to allow ongoing tax bills to accrue that have risen from €400 million to €450 million and which would have been €500 million this year. Pressure must be brought to bear upon the insurers to reduce the cost of private health care.

Michael McGrath (Cork South Central, Fianna Fail)
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The problem is the pressure is on the policyholders.

James Reilly (Dublin North, Fine Gael)
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That pressure would not exactly be felt were the Government to turn around and continue to hand tax breaks to the insurers' customers to meet their increasing premium costs because they failed to address their underlying cost base.

Billy Kelleher (Cork North Central, Fianna Fail)
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The Minister was in favour of that tax break.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you Minister.

James Reilly (Dublin North, Fine Gael)
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Deputy Kelleher has had his little say.

Billy Kelleher (Cork North Central, Fianna Fail)
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If I remember correctly, the Minister nearly threatened to resign over that tax break.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Please.

Alex White (Dublin South, Labour)
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What about the Commission on Taxation findings?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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As we started late, the final question will be Question No. 10 in the name of Deputy Durkan.