Maria Corrigan (Fianna Fail)

I join colleagues in welcoming the Minister of State. I welcome the clarity he has provided in his contribution by outlining the Bill's necessity, which is to provide for an interim scheme that can be put in place to ensure continuation of the system of single community rating and risk equalisation while a longer term solution is being developed. The Minister of State clearly outlined that a failure to pass legislation on an interim scheme could result in a risk-related market developing in a manner that would make it impossible to revert to an effective community-rated market at a later stage.

I welcome the Minister of State's announcement that regulations will be introduced in early autumn with the intention of commencing lifetime rating by the end of the year. It is particularly important, as it will encourage younger people to continue to take out health insurance. Those who delay until they are older will be liable for late entry loading, reflecting the fact that they did not contribute positively to the overall risk pool. This is the importance of community rating and risk equalisation within the health insurance market. That there is no differentiation in terms of age or health status has been an important market component.

Colleagues have referred to parents, relatives or people they know who have paid for private health insurance for all of their lives. Were we not to have a community rating scheme and risk equalisation, it would be paradoxical that those who contributed positively to the collective pool of insurance for all of their lives yet may not have utilised it would be penalised by higher insurance costs as they became older. The introduction of community lifetime rating to encourage younger people to take out insurance is essential if our principles of community rating and risk equalisation are to be effective. Otherwise, there would be no incentive and those people could go for ten or 20 years without contributing, yet still be able to access insurance at the same rate as everyone else.

I wish to ask the Minister of State about one of the measures in the legislation, namely, tax credits that will become increasingly available according to age. As I listened to him, I remembered a constituent who raised the matter with me some years ago. An older person, he was on a pension. When he required a consultant's services, he opted to attend a private consultant instead of going on the public waiting list. He paid full private consultancy fees. Since he was on a pension, he was not paying any tax, so a tax relief or tax credit was of no benefit. He made the point to me that, by opting to attend a private consultant, he had taken pressure off the public service by not adding to public waiting lists. While everyone else was able to avail of a tax relief, he could not. Will the Minister of State clarify how tax credits will work in respect of older people who do not pay tax? I am struck by the point that this man asked at the time whether some measure, in the form of a supplement or subsidy, was available. He was continuing to contribute at an older age.

I welcome section 8, which will require all insurance companies to submit samples of all new contracts to the Health Insurance Authority ten days prior to the sale of any new contract.

I was very struck by the comments of Senator Quinn on the importance of rewarding behaviour that is conducive to good health. There is merit in considering his point that it may eventually be possible to develop a scheme that would achieve this. It is in everybody's interest and insurance companies should consider actively how they can provide incentives for those who engage in behaviour that is conducive to positive health. Ultimately, in addition to a benefit accruing to the State on foot of there being no increased pressure on the health service as a result of ill health, a benefit would accrue to the insurance companies in that there would not be as many claims as a result of ill health.

I look forward to Committee and Remaining Stages and compliment the Minister of State on the legislation.