Sean Barrett (Independent) | Oireachtas source

I welcome the Minister. I speak as a total unbeliever in risk equalisation payments. I believe in open enrolment community rating and lifetime cover. No one was ever refused cover on any basis by the new competing insurance companies that came into the market after the turn of the millennium. The success of BUPA, in particular, was that it could insure both young and old people for a lower price than VHI. I have always believed the legislation was designed to benefit VHI as it was the operator longest in the market.

In a sense, we are going through what is an annual charade, the object of which was to keep VHI solvent. There was a massive increase, which should be documented officially, in premiums and that drove the 300,000 people out of the market. To say the competing insurance companies were not interested in old people and would not insure them was a myth invented in the VHI HQ beside the Abbey Theatre. It turns out the VHI was similarly theatrical and managed to persuade successive Ministers that this was the way to proceed.

I want a system which will insure both old and young people cheaper. I left VHI to join one of the newer companies. I am supposed to be a beneficiary under this Bill but I see it entirely as being for the benefit of VHI. There were plenty of good products offered by the other companies but this constrains their ability to compete. VHI is by far the biggest beneficiary of this particular payout. The bureaucracy to run the Health Insurance Authority costs €1.4 million a year. All that was required under the old system was for old people, who VHI said were locked into its policies, to shop around and avail of the available bargains. That is what competition does.

It was also necessary to have competition among insurance companies to extract a lot of the high costs out of the public health system such as the cost of hospitals and medication. We lost a competitive edge by introducing the measure. It is interesting that a lot of young people got out because they did not feel like subsidising an insurance company, which had mostly old people. Those old people had been with the VHI since the 1950s anyway, so presumably they had paid in advance.

I do not wish to cause any dissent among learned friends but I do not believe in risk equalisation payments and that is what is in the Bill. I will not propose any amendments. I agree with the harmony proposed by Senator Burke but, at the same time, it could have been done differently. It was wrong to have the Department of Health own a health insurance company and regulate the market under which the other health insurance companies compete. This Bill is the result.

As always, I wish the Minister well in his onerous task. An unfortunate aspect of what was happening is that we have moved further away from universal health care. At one stage, 55% of the population had health insurance and 30% had medical cards. We have lost people out of the health insurance sector. The Minister was right to postpone universal health insurance until we had thought it out properly. We were closer to it seven or eight years ago than we are now. I do not know if anyone else in the Oireachtas has welcomed his decision to postpone the introduction of universal health insurance. I have heard a lot of criticism of the decision but in the circumstances the Minister was correct.