Feargal Quinn (Independent)

Perhaps the Leas-Chathaoirleach will remind me if I exceed six minutes. The Minister of State is very welcome and I am glad to see him in the House. I support the aim of the Bill, namely, to ensure that older people and those with illnesses are not forced to pay higher insurance premiums, as they would be if the market were left unregulated. I hope the scheme will counter the motivation among insurers to focus on younger age groups and that insured persons will be less likely to face higher increases or product segmentation related to their age.

Given that last year the VHI made profits of €112 million and that most of the levy to be collected is to be used as a form of subsidy to the VHI, I am sceptical as to whether this is merely a distortion of the market. I foresee more hardship for the more than 2 million people in this country who have health insurance. Senator Twomey asked whether the Government will go ahead with its plan to sell off the VHI in some years' time. I would like to know that too. If that is the case, it seems clear that the motive behind this move is to divert much of the levy to the VHI. I wonder why we are not introducing a long-term risk equalisation scheme at this point. This is an interim measure for only three years, supposedly to stabilise the market. I can only presume that part of the reason for this move is the ongoing legal challenges, such as that from Hibernian Aviva which plans to take a legal challenge to the decision of the European Commission to endorse the Government's health insurance levy.

What plans are in motion for the Government to establish a long-term risk equalisation scheme? Although the aim of the Bill is to prevent premiums for the over-50s rising to unaffordable levels, it is questionable whether this will be the case. Higher premiums seem inevitable for those under 50. At what point does health insurance become unaffordable for this group?

The Minister of State mentioned that both the age-related private health insurance relief and the levy will be subject to annual review to take into account medical inflation and the impact of an ageing population. I do not believe there will be medical inflation. Instead, I predict medical deflation. At least I hope that will be the case because if one compares medical costs elsewhere, what we pay doctors south of the Border is greatly in excess of what is paid north of the Border. There will be changes and I hope it will be on that basis.

I draw the Minister of State's attention to a situation that attracted me greatly in the United States. The US has a different insurance system, but I do not propose we should adopt it. Safeway, an American supermarket company, has instituted a policy for its 200,000 employees that is well worth examining and very interesting to observe. Some 47 million Americans have no medical insurance, while tens of millions of others are underinsured and probably cannot afford to go to the doctor. Those with jobs are in a much better situation. I do not propose we copy the American method, but Safeway has introduced a scheme that rewards good behaviour among its 200,000 employees. It is preventative rather than curative. Safeway states that if its employees behave in a certain manner their medical premiums will be reduced. The scheme has been so successful that the company has formed a consortium with 60 other companies to attempt to introduce it into the American system. They reward those who do not smoke, who take regular exercise and who watch their weight. This behaviour has enabled them to reduce their costs. In terms of the cost of health insurance, behaving well and acting to prevent diseases that they might otherwise have had have been of benefit.

Safeway makes the case that four chronic conditions account for 74% of all health costs, namely, high blood pressure, high cholesterol, arthritis and respiratory diseases like emphysema. It believes that changes in one's behaviour can alleviate most of these conditions. The results have been startling. Steve Burd, Safeway's chief executive to whom I spoke last week, has almost become a missionary, making the case for prevention rather than cure.

Introducing something similar into our insurance system must be possible. I am not sure how it would be done, but examining the case of Safeway and the other 60 countries that joined it in the United States of America would be worthwhile. The scheme's ability to reduce costs is significant. Senator Feeney's comments on the years of high costs and inputs were interesting because I have had the same experience, in that we do not aim to reduce costs to the extent that we should do. This should form part of the target. If we can achieve it by rewarding good behaviour - taking exercise, not smoking and watching weight - we will be able to reduce the costs of health insurance and prolong people's lives.