Sean Barrett (Independent) | Oireachtas source

I move recommendation No. 32:

In page 141, to delete lines 36 to 43 and in page 142, to delete lines 1 to 18 and substitute the following:
?(a) in respect of relevant contracts renewed or entered into on or after 1 January 2013 and on or before 30 March 2013, ¤0 in respect of an insured person;?,?.

This relates to a stamp duty imposed on health insurance transactions being increased from ¤285 to ¤290. I imagine the increase will not change matters much although there has been a large exodus of customers from this area. Anyway, I believe we could raise the same revenue by an ad valorem tax.

Let us consider the figure of ¤290. I gathered some quotes from the health insurance business. For example the VHI one plan plus is ¤957 and therefore the tax would be 30% percent of that. The VHI HealthSteps gold plan comes in at ¤320 but the tax is 91% of that. The VHI first plan plus comes in at ¤1,336.99 and the tax is 22% of that. It is a flat rate of tax regardless of the health insurance expenditure. I realise there is some moderation and the Minister of State referred to a high-cost provision but broadly it is a flat-rate tax. This may drive people out of the lower end of the market. The VHI HealthSteps gold plan costs ¤320 and therefore a ¤290 tax is a 91% tax on it.

If people pay more for health insurance and move up to more expensive plans why should the tax rate fall? For next year could be Minister of State see whether a percentage rate on health insurance transactions to raise the same revenue could at least reward the schemes which achieve the economies which we all want in the health service and which drive down the price? In this case for lower priced plans the tax rate goes up which seems to me to be contrary to what the Houses seeks in respect of what is a very expensive health service. The health insurance scheme has been driving away customers although it is part of the Government's plan to bring about a system of universal health insurance. It is a regressive form of tax to have the same amount charged regardless of the price. Clearly, this leads to a higher share of the low-cost product and that is the problem I have with it. It is not so much a matter for today, but will the Minister of State consider in future raising the same revenue by a percentage tax, calculated to bring in the same revenue, and which will charge more to high-cost plans and less to budget plans?