James Reilly (Dublin North, Fine Gael) | Oireachtas source

I thank all those Senators who contributed to the debate. This is important legislation to underpin the principle of community rating, on which both sides of the House agree. Senator Sean D. Barrett mentioned not asking the age of customers applying for insurance. Unfortunately, to assess them for risk equalisation credits, we have to know their age, but I take in good stead what then Senator is implying in adopting that approach.

In regard to insurers which state they never turn away older customers, there are many ways to segment the market and discourage older people. Let us go through the figures which are interesting and which I stated on radio. Aviva Health has 17% of the market, yet it only has 6% of the over 80s cohort and 9% of the 70 to 79 year cohort. One would expect it to have three times as many of the over 80s and twice as many of those aged between 70 and 79 years. Laya Healthcare has 22% of the market. Therefore, one would expect it to have 22% of the over 80s, but it has only 6%.

One would expect it to have 22% of those aged 70 to 79 but it has only 12%. I am sure the Senator would agree that these things do not happen by accident. The VHI, on the other hand, has 56% of the market and one would expect it, therefore, to have 56% of those over 80. It actually has 89% of those over 80. With 56% of the market, one would expect it to have 56% of the 70 to 79 year olds but it has 78% of that age cohort. It is very clear from their marketing campaigns that insurers can find ways of discouraging older people from joining and can create products that are attractive to younger people, thus encouraging more of them to join their companies. I would also point out that having 256 products on the market, plus another eight, giving a total of 264, is designed, in my view, to confuse the market and confuse customers. There is no need for that number of different policies to be out in the marketplace.

The other question to ask is what is going on in our private health care system? We have seen a reduction, year on year, of up to 60,000 customers and yet we have seen an incessant rise in both the cost and number of claims per person. Another startling issue is that of medical inflation. If my memory is correct, medical inflation has been at 9% per annum on average, when from 2008 until now general inflation has been at certain times negative and, at most, 3%. The average rate of general inflation over that period is 0.3%. There is no justification for this. The reality behind it is the failure of the insurance companies to tackle the cost of private health care. They have failed to undertake proper auditing. The VHI started auditing last year and one private hospital in this country found itself paying back €5 million. All of the other private hospitals will be similarly audited.

There has been no clinical auditing at all, which is astonishing. Clinical audits involve checking whether tests carried out were actually necessary. One company, when challenged on this, said it had four personnel to deal with this issue. It had four nurses to do this work and, no disrespect to the nursing profession, but I do not think it is fair to ask a nurse to challenge a cardiologist on why a test was done. It is not even fair to ask a GP or surgeon to do that. The only person fit to challenge a cardiologist is another cardiologist and the only person fit to challenge a surgeon is another surgeon. The insurance companies need to employ these people to carry out proper clinical audits. What has been going on in some instances is just outrageous, with one person earning €1 million from the VHI in a single year. That indicates, in the clearest possible way, that we are paying far too much for medical procedures. No bench marking has been done and there is no ongoing review of what it takes to carry out these procedures, even when they are necessary. In many instances, the procedures are necessary but the controls have not been put in place and the methodology for paying people has not been reassessed in any meaningful way. Some procedures used to take two hours but now only take 20 minutes but we are still paying the same money for them. That is not acceptable. All of these issues must be addressed and will be in 2014 as contracts which have been in place for the last two or three years come up for renewal. That must be done. However, that is not the purpose of the Bill before us today.

This Bill is very important in terms of its capacity to support the market, to allow people to remain in the market and to encourage older people to continue in the market. Lifetime community rating is something that we are going to consider. Why should someone at the age of 60 who decides to take out health insurance have the same premium as somebody who has been insured for the previous 30 years? That is something we are going to look at. We are exploring, through Patrick McLoughlin's report, other methods of encouraging younger people back into the market. I will not delay the House. I believe this Bill is very important and will help to underpin the market. It will assist older people and those who are less well to stay in the market by being subsidised by those who are younger and healthier, which is what, in fairness, many of the people who are older now did for the previous generation. I commend the Bill to the House and look forward to the support of Senators.