John Moloney (Laois-Offaly, Fianna Fail)

Yes, there is no change. The level of the credit and the levy was calculated based on current market data and was not agreed by the Department taking a notional figure.

It would not be possible to impose a higher levy on specific plans. In granting a standard level of credits an equitable approach has been taken. The Government will shortly be considering the best approach regarding VHI's authorisation. This scheme is separate to that question and will not fully compensate VHI for its adverse risk profile. That was pointed out often during the deliberations of the health committee some time ago when those points were made on a regular basis.

Senator Feeney offered her support to the Bill. It is welcome and I welcome the fact that she and Senator Twomey agree on so much. That has been noted. I see peace breaking out in every area.

The scheme does not penalise companies. It is a necessary measure in the community rated market. I also wish to emphasise that the levy is not being imposed on any person, rather it is on the insurer. The VHI has given considerable attention to reducing costs and most of its coverage now concerns day care, which were the points raised by Senators Feeney and Twomey.

The high costs of VHI were referred to in this House and the Lower House. VHI does not control its costs in an effective way - this point has been made. However, all insurance companies in the health area, here and abroad, face significant costs in meeting the claims of their members. VHI is no different from any other insurer as it, like Government-funded services, sees new technology constantly emerging, whether in drugs or new imaging equipment. It is also seeing an increase in activity in acute hospitals, particularly in day work. I understand VHI does take steps to control costs, such as through robust negotiations with private hospitals on their budgets and with medical consultants. Senator Quinn referred to VHI's profitability and status. The provisions in this Bill only partly compensate VHI for its age profile. Should it emerge that medical inflation falls, it will be part of the Health Insurance Authority's assessment in considering the level of credits.

The overall impact of the measures in the market is neutral. As the amount collected in levies is paid it is not possible to implement a new risk equalisation scheme in the time available. That is why the interim measure is being introduced. I take the point made by Senator Twomey, who asked why, in all the years we have spoken about the issue, it is happening now. It is an interim measure until the complete legislation proposed is passed. We will take the issues and proposals made here into account in the interim measures before the new scheme is developed.

Senator Prendergast raised similar points. VHI's financial position is not as positive as she indicated. For example, it has recorded significant losses for 2008. With regard to the availability of higher tax credits, the position is that by granting the credit at source, even those who do not have a tax liability will benefit.

I will deal with the points raised by Senator de Búrca. With regard to lifetime community rating, the regulations will specify a maximum percentage that can be applied to the standard premium in respect of each year beyond 30 that the person concerned does not hold cover. They will not apply to persons who have cover before the regulations are made. Issues raised by Senator de Búrca on protecting the elderly, given the cost that inevitably arises from the care of older people, is at the centre of the Bill. Furthermore, the Bill also contains a number of measures aimed at enhancing the position of the insured.

A number of points were raised by Senator Norris. With regard to the common good aspect of the framework, the Government is obviously committed to protecting the common good and ensuring the conditions are met. Consequently, the Bill includes a number of measures beyond the interim scheme which the Government aims to achieve.

Questions have been raised about the long-term future of the VHI and, specifically, whether it will be sold. The Minister, Deputy Harney, referred to this issue on a number of occasions. She is considering the issue of authorisation of VHI as an insurer at present and the Government will deal with the authorisation as soon as possible. The issue is raising the capital to allow for authorisation and there are obviously options in this regard. All these will be considered by the Minister in framing the final document.

I will take into account the issues raised by the Senators and will respond more directly on the next Stage of the Bill.