Frances Fitzgerald (Fine Gael)

I will make several points on the levy on insurers. The concern is that the levy has forced up the price of health insurance for health consumers. The cost of premiums has increased in VHI, Quinn Healthcare and Hibernian Aviva Health by 26%, 16% and 22%, respectively. I note, however, that Hibernian Aviva Health has indicated that increases will be kept in separate accounts and returned to consumers if the European Commission does not approve the levy.

There is a concern that the levy will make private health insurance unaffordable and will result in a contraction in the private health insurance market of at least 10%. As Senators will acknowledge, families are finding it increasingly difficult to afford private health insurance and will continue to leave the market as a result of the economic position in which they find themselves. The introduction of a levy on health insurers will result in an increase in the cost of family premiums of as much as 20% on typical plans, rising to 32% for some cheaper family plans. Such increases would put considerable pressure on those who are just managing to stay in the private health insurance market. If premiums continue to increase, families will leave the private health insurance market, thus placing even greater pressure on the public health system. People believe they need private health insurance and want the choice it offers.

The levy will also increase the costs of employee benefits for companies, an issue that was addressed in the other House. It will increase the costs of trading here for the companies in question, many of which supply health insurance as part of their package to employees. The levy could amount to an increase in costs of €12,800 for a company with 100 employees and could be much higher for larger companies. The impact on a medium size enterprise of 50 people would be an additional cost of €6,400. This is a problem because the costs of premiums, which are increasing as matters stand, will increase as a result of the levy. As a consequence, the market for private health insurance could shrink. I will make several further points on subsequent sections.