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

I am reflecting on Senator Barrett's comments and I agree with him that the costs have been a problem. The VHI having a large cohort of older clients and therefore greater cost has become a bit of a focus to the neglect of many other areas where it can control and needs to address costs. That is very much my focus and I am pushing it down that road. It has a new cost containment committee and it reports to me that it will have new very aggressive methods of dealing with its existing high costs. I will not reiterate what I said previously.

I am concerned that the average length of stay has risen in the private sector while it is falling in the public sector and the cost of claims is increasing despite fewer people being insured. Regarding many of the Senator's other suggestions, risk equalisation addresses the issue. It is very clear that it is a subsidy to older customers by younger customers and to less well customers by customers in better health. However, the key point is that it is a subsidy to any insurer which cares to insure older people. As Senator Colm Burke pointed out, the problem is that they are not doing that. So we will continue with the risk-equalisation scheme in order to address that.

I thank the Senator for his amendment. However, clearly my priority is the implementation of a robust equalisation scheme while minimising the impact on insurers' ability to carry out their business. The legislation contains consumer protection measures providing that notification of a variation to product benefits already on the market may only be made once a year and subject to 30 days' prior notice to the Health Insurance Authority. The Bill makes provision to extend the applicable date by which any changes to existing product must be notified to two months from 1 January 2014 to 1 March 2014. It means that changes that alter the product categorisation from non-advance to advance may only take effect from 1 March 2014 and any subsequent year. Any changes that alter the product categorisation from advance to non-advance can only take effect from 1 March 2014, thus in keeping with section 7 where the effective day for revised rates of risk equalisation credit is amended to 1 March 2014.

While I have no doubt that the Senator's intention is to protect the consumer, the result of his proposed amendment would be to create a window of opportunity where registered undertakings could increase the benefits or reduce the price to target individuals and thus further segment the market. Therefore, I regret I must reject the proposed amendment.