Liam Twomey (Fine Gael)

When we were debating this on Second Stage, I spoke about these levies that are being applied. The Minister of State may say that the same levies may have come into play if risk equalisation were in place, but I do not know whether that is true. It is a significant levy on young families. If we take a mother, father and three children, there will be an additional tax on young families of €500 per year. That is a significant sum of money.

Does this highlights the potentially sorry state of the finances of the VHI, or is that the VHI is being fattened up for privatisation? The 40% reserve for the VHI is way out of kilter with what is needed for health insurance. Health insurance is not like insurance for storm damage and so on and is pretty predictable over the course of a number of years. I do not think there is a need for it to be at 40%. I cannot understand why the Government has not advised the Financial Regulator to lower this to 25%, which is the figure in many other countries. Even after a pretty disastrous investment year, the reserves of the VHI are still at 27.5%. If the level was dropped to 25%, the VHI's reserves would still be adequate. It may well be good enough to hold it at that rather than introducing another levy on young families. The Government should think a little bit more politically about families rather than thinking purely economically from the point of view of the VHI.

Rather than bringing this Bill through, we should have sorted out the mess that is risk equalisation. Every single individual in this House supports the concept of community rating and the need for risk equalisation, but this does not deal with that problem and the court case that has just come about. This is a sort of quick-fix solution, but it is a huge levy on young families and this section is now authorising that levy.

I have seen nothing whatsoever about controlling costs within the VHI. I spoke at length on Second Stage that invoices and bills from the VHI are almost made up. Hospitals bill the VHI with bills that would be unacceptable to any major health insurer in the US or in mainland Europe. People can basically add in their fees without any major checks and balances. The hospital is not inclined to push that sort of check because it is income for the hospital and in these difficult times, the hospital needs every single euro it can get its hands on. I do not know whether the VHI is controlling its costs to the best of its ability. Other avenues should have been examined, such as reducing the reserve and looking at the cost base and making savings there rather than hitting young families with a new levy.