Sean Barrett (Independent) | Oireachtas source

Go raibh maith agat, a Chathaoirligh. I welcome the Minister to the House. I remember when the Minister was here in his previous capacity as Minister for Transport, Tourism and Sport that we had a valuable debate on what it meant when people were reported as having no driving licence - did it mean they did not appear in court for the licence or that they disguised it from the Garda? That led to the whistleblowers and all the other things and helped to get a more informed debate in the Seanad. The data was presented on that occasion in such a way as to suggest that 40% of the people were boy racers who had never had a driving licence. In fact we found that they had and we tried to push the Minister and his successor to oblige people to carry their licence when driving and to produce it in Court when required. It made the system much easier to operate.

I welcome the Minister's slowing down of the movement towards universal health insurance. Many flaws were emerging, not least, as his speech indicated, the fact that 300,000 people have left health insurance since the peak, although there are some slight signs of revival now. I have misgivings about what is proposed. The McLoughlin report shows that we have now chosen to target people in very difficult circumstances. Young adults are going to have to pay more because the Department is afraid they will wait to purchase health insurance until they are older. Mr. McLoughlin says there has been a decline in graduate salaries, taking them below 2004 levels. These are also people who have serious difficulties with mortgages because they were on the wrong end of the property bubble with which all of us on both sides of these Houses are still trying to cope.

In some of earlier briefings it was said that probably one of the most reluctant partakers in competition in the private health insurance market was the Department of Health. The 1992 EU Third Non-Life Insurance Directive essentially forced competition on it, as is stated in our briefing document No. 87, which we got in 2012. That has always been my impression. The Department of Health has its own health insurance company to protect and that is all it ever does. It is not interested in community rating or young people. It is interested in supporting its own company. The Milliman report found that an average length of stay, when the VHI was paying, was 11.6 days, while internationally the average stay for an equivalent treatment was 3.7 days. It was a heavily redacted report - I think there were over 50 redactions - but there was enough information left to find that out. We needed competition to make the VHI cost conscious. Everything the Department has done in recent years, including its actions in the Supreme Court, the High Court and the European Court, has been to protect the VHI. We still keep on seeking annual exemptions from the European Court decision that the regulation of VHI should pass to the Central Bank.

As far as I am concerned, it is a lot of poppycock for the Department to say it is really looking after old people and so on. In the court cases, it was never able to produce any witnesses who were refused cover by the new entrant insurance companies on the basis of their age. If there were such people, why were they not produced as witnesses? They would have been very valuable, but the other companies did not refuse to recruit old people. That was a bogeyman invented by the Department of Health in order to protect the insurance company for which it had responsibility.

It must be an infringement of all kinds of human and civil rights that the Minister for Health appoints both the board of the VHI and the board of the Health Insurance Authority, which is supposed to regulate the sector.

It is wrong that the Minister in charge of a sector should have control of an insurance company in that sector and also gets to appoint the referee. That seems to be a particularly strange arrangement.

What we want is to have competing insurance companies that are able to the tell the Minister for Health and Oireachtas Members that they charge less not because they turn away old people, which they do not, but because they are able to get better deals from what is an expensive health service. The expense of health insurance has driven 300,000 people away because the cost of health insurance premiums kept being indexed upwards. The cost base of health insurance must be tackled, and the Milliman report provided a good way to do so by specifying the need to check on average lengths of stay, the high cost of drugs, the high cost of procedures, the cost of tests and the extent of work being done on overtime rates.

When detailed billing was introduced, I recall that one of leading items on "Liveline" for quite a while was people telling Joe Duffy about their hospital bills, which included items that they had not had. We do not allow full competition in the health insurance market under the mistaken belief that the insurance companies that are new to market charge less because they recruit young members. Any sector that is relieved of the stimulus of competition grows flabby. That is what happened to the VHI, and it lost 300,000 people. It now thinks that by forcing younger people to take out insurance, because they are not allowed to join at a later stage, it will get the numbers back up. Why does it not perform in a normal competitive market, similar to other sectors? Why does it not attack the cost base, as in other sectors? All that was necessary was that old people, if they are supposed to be the beneficiary, shop around. If one joins a health insurance scheme that has more young members, one will get a better deal than if one joins a company that has more older members. Adjusting to competitive pressures would have made VHI a better organisation and one that is not always seeking protection from the Department. The solution was there. I do not think there was ever any problem for old people in getting health insurance in this country; the problem was the VHI.

The fact is that the Minister was in charge of a sector as well as owning an insurance company in the sector. The State insurance company should have passed over to the then Department of Industry and Commerce, rather than remaining under the Department of Health, which I think prevents innovation and competition.

The number of people taking out health insurance has decreased. I think Mr. Pat McLoughlin, who chaired a review group that considered costs in the private health insurance market and addressed the issue, but a great deal more needs to be done to find out how such a high-cost sector develops and how its costs exploded in recent times. The costs have increased by 58% since 2008. What is wrong with the cost of health insurance in this country?

Is this solution - which has merit, as Senator O'Donovan has said - just another way of papering over the cracks in the system? I am glad to say the Minister for Health is looking at costs and that he has decided to push out compulsory health insurance until we get these cost issues under control.

There should be open enrolment and lifetime cover, and nobody should be refused. There is literature in the United States - this is more in the Minister's field than mine - stating that being old is not necessarily a problem, that we only die once and that significant expenditure is compressed into the last six months of a life. Is it a myth that older people place a heavy burden on insurance companies, of the kind implicit in the Bill?

There is a school of thought which says the opposite. Interestingly, in the United States the cost curve on health insurance is actually coming down. Health as a share of GDP is coming down as a consequence. I thank the Minister for his presence. I will check whether the consideration about which I have been reading requires the tabling of amendments on Committee Stage.