Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank Senators for their contributions to the debate. Senator O'Donovan welcomed the Bill and accurately pointed out that it will not be a panacea or a utopian solution to the cost of health insurance but that it will help. My timeframe would be a little more ambitious than the Senator's; I hope we will start to see measurable increases in the number of people with health insurance next year and not only in five or six years time.

The Senator also advised people to shop around. I strongly agree with that advice. There is good value in the market and better value than many people have got. Insurers not only in the health area but across the insurance market are pretty wise to those who change and those who do not. Those who are willing change their provider get better value. I encourage people to check the different websites every year to see if they can get a better offer.

Senator Colm Burke pointed out that some people, particularly younger people, believe that they do not benefit from health insurance, and I think that is true. The kind of thinking we need to engender more is the idea that heath insurance is a little like pensions. Nobody would expect to start paying into a pension at the age of 55 and get the same benefits when they retire as somebody who was paying in from the age of 35. What we are trying to do here is engender the idea and the understanding among the community that people benefit individually and we all benefit if people start paying for health insurance as soon as they can afford to do so, certainly at the age of 35 or younger.

Senator Burke also mentioned the cost of medical negligence, which contributes to the rising cost of claims and impacts on the budget for the State Claims Agency, health insurance costs and professional indemnity costs for clinicians, which have increased considerably for a small number of specialties. That is a separate matter but it is one to which I am attuned and on which I need to confer with the Minister for Justice and Equality, Deputy Fitzgerald, particularly on what can be done in the area of tort reform.

To be clear, I would point out to Senator Barrett that under the proposals I hope the Senators will support today, young adults will pay less because we are removing the step effect that currently exists at the age of 21 when somebody moves from the child rate to the adult rate. It is anticipated that people between the ages of 21 and 25 will pay less than they do now because the increase will be graduated rather than there being a sudden step effect. Those aged between 25 and 35 will pay much the same. Those who will pay more are those above the age of 35 who are joining the health insurance system for the first time. That is a slightly different group from young adults; it is middle-aged adults, dare I describe myself as middle-aged.

It is those aged 35 and above who will pay the loading, not those aged under 35. In fact, the latter stand to benefit under these provisions.

I am very much a supporter of competition. Certainly, I do not see my role as Minister as involving an obligation to protect VHI or anything like that. The Government, on the other hand, does have an obligation to protect taxpayers from potentially having to recapitalise that entity. We are committed to addressing the findings of the European Court of Justice in the case concerning the regulatory status of VHI, which requires the company to be authorised by the Central Bank as a health insurer in the normal way. VHI submitted its application on 16 May this year and has been working very closely with the bank to assist the latter's examination. The Department, meanwhile, has provided any clarifications that were needed. We understand the bank's examination of the application is continuing and there has been no final determination about any capital requirements. VHI has committed to self-funding the capital requirement and the bank will make its decision on this requirement as part of its overall assessment of the application. We expect VHI will be authorised at the earliest opportunity, if approved by the Central Bank, and we keep the EU Commission regularly briefed on the status of the application. It is our expectation that VHI will be so authorised in the early part of next year and regulated thereafter in the same way as any other health insurer. It is encouraging that VHI's cost claims have come down for the first time. That development is, in part, due to the increased competition in the market.

Senators Barrett and Quinn identified a potential conflict of interest in that both the Health Insurance Authority and VHI come under my remit as Minister for Health. The same could be said of transport, for example, where both the Commission for Aviation Regulation and the Dublin Airport Authority are under the remit of the Minister for Transport, Tourism and Sport, as are both CIE and the National Transport Authority. However, the Senators make a good point. In other jurisdictions, I understand the chairperson function for these types of enterprises is separated. It is something that should perhaps be considered in the context of a future programme for Government.

Senator Barrett pointed out that in the United States, the proportion of GDP spending on health is falling. I am interested to hear that, while noting that it is starting from a very high base of some 13% or 14%, which is extraordinary. The Senator observed that a person only dies once. While that certainly is true, it also is true that one can survive many times. One of the reasons we have greater life expectancy is that people now survive illnesses which would have been fatal in the past. Where a 67 year old might have died of cancer some years ago, such a person may now live on to 72 before suffering another illness. That is why improved life expectancy is related to increased health care costs. It is not so much that people do not die but, fortunately, that they are more likely to survive a particular illness. Each time a person survives a serious illness, there is a cost associated with it. Likewise, there is a cost associated with chronic illness, and that cost increases the longer a person lives with the illness.

Senator Gilroy asked whether the reduction in the levy will result in lower premia. That will not necessarily happen because it is a marginal reduction of less than 1%. However, it does send an important signal to the industry that the Government is doing everything it can to contain the cost of health insurance. My expectation is that the types of increases we have seen in premia in previous years will not persist into the new year. I am pleased to see some insurers taking account of these changes by announcing that some of their policies will reduce and offering some very good new products.

I welcome Sinn Féin's broad support for the Bill as indicated by Senator Cullinane. I share his objective that access to the health service should be based on need alone. The question is how one gets there. The most important step we can take is to invest much more substantially in primary and social care. Too much of health care delivery in Ireland is done in our hospitals. The opportunity exists now for the first time in a long time, with budgets once again expanding, to ensure a greater proportion of funding goes into primary and social care. The second action we must take is to make health insurance more affordable, with a view to getting the percentage of people with insurance up to 60% or 70%. It was 50 something at its highest, but we could move to universal health insurance much more easily if two thirds or three quarters of people already have a policy. It is interesting that Sinn Féin's policy is to transfer €90 million from the Exchequer budget to policyholders. That would make health insurance more expensive for those on average salaries.

It would represent another tax on middle-income families. It is important to point out on the election trail to anybody with health insurance that a vote for Sinn Féin will mean not just higher taxes but higher health insurance as well.

Senator Quinn suggested that we should pay the doctor to keep us well rather than treat us when we are sick. It is an interesting idea and I can only imagine what perverse incentives might arise if doctors were to be paid for indicating that people are well rather than being sick. It might work from an Exchequer perspective but I am not sure how it would work from a health perspective. Senator Cullinane also advocated cutting out the middle man and suggested that insurance companies were these "middle men" and profiteers. That depends on how one looks at the world, as the Senator's argument is that monopolies are more efficient than markets. I do not agree with that, as his essential contention is that if we only had one type of supermarket in the entire country, we would cut out the profiteers. Perhaps we would also cut choice and end up with much higher prices. The view expressed by Sinn Féin is very much that old-fashioned communist, corporatist model that if a monopoly is in place, people will get better value because there is no profit. I do not agree with that at all, as profit creates a motivating factor for better value and choice for people.

Senator Quinn mentioned an interesting idea about reducing premiums for people who partake in exercise, eat well or do not smoke or drink. Although it is interesting idea, it would result in a major departure from community rating, which we have in this country, towards a system of risk rating. It may result in lower premiums for some people but it would certainly result in much higher premiums for just as many people; very often, those people would be older and more sick. I am not sure that is a route we want to go down.

The introduction of this Bill, taken with a series of measures I recently announced to address the rising cost of health insurance premiums, is designed to work in a package. I want to make private health insurance affordable again for as many people as possible in a sustainable market and try to limit the need for increases in premiums. Following a long period of rising premiums and a severe decline in health insurance cover, the number of policyholders is now exhibiting signs of stabilisation. I hope these new measures will allow that trend to continue and I hope the insurance companies will respond favourably. I thank the Senators for their contributions and commend the Bill to the House.