Keith Swanick (Fianna Fail) | Oireachtas source

I welcome the opportunity to speak to this Bill and welcome the Minister of State to the House. Fianna Fáil will be supporting this Bill, although it is disappointing that risk equalisation levies are set to increase in 2017. The Health Insurance Authority, which regulates health insurance, states the increases are designed to support risk equalisation and sustain community rating in our health insurance market in order that older citizens and people with illnesses can afford health insurance and are not discriminated against in favour of younger, healthier people. Risk equalisation and community rating is something we have always supported as a party.

The Bill provides for a 10% increase in health insurance stamp duty levies, as recommended by the Health Insurance Authority. Stamp duty in respect of products providing advance cover is to be set at €444 per adult, an increase of €41, and €148 per child, a rise of €14. Whereas we accept the judgment of the regulator as to what is needed to maintain stability in the market, this is a very big increase. A big problem with the levy is that it is a flat levy, so it is socially regressive from a taxation perspective. Somebody who pays €700 for a plan has a levy of €444, the same as somebody who pays over €5,000 for a plan, which is nonsensical. There is no other stamp duty that operates like this within the system. VHI competitors feel the flat rate of the levy acts as an advantage for VHI, as it has the highest premiums in the market and hence is most advantaged by putting in place a flat levy. It is the case that the flat levy means that those on the lowest plans are paying disproportionately more than those on higher plans.

There is another issue that arises with the levy, particularly the fact that the full levy is payable the moment a person pays his or her first premium, even if it is subsequently cancelled. Credits are only provided on a monthly basis and this mismatch causes problems that have previously led to a surplus in the scheme, pocketed by the Revenue Commissioners. In 2009, Fine Gael claimed a €160 levy was anti-competitive and a means to prop up the State-dominated player, while VHI remained super-dominant in the health insurance market. The levy has increased from €160 to €444. Our values as a party are to support older and sicker people. It is not just from a sense of obligation but because we respect and value older people and the dignity of each person in his or her illness, medical condition or disability. That is why while in government we decided on a comprehensive set of actions to support older and sicker people who have private health insurance. We are firm in our view that the principle of solidarity should apply in private health insurance as well as in public health services.

Private health insurance has played an important role in funding and organising health care in our country for more than 50 years. In 2010, it was funding €1.7 billion of health care claims. As the Minister of State knows, in excess of 2 million people in this country have private health insurance cover and among them nearly 340,000 people are aged 60 and over. Many have been paying for health insurance all their adult lives and have the entirely fair expectation that the health insurance market will not be permitted to change in a way that diminishes their cover. It is entirely right for people to expect that they would not face higher health insurance prices just because of their age or a particular medical condition. This is because consistent State policy has been that the health insurance market should be community rated, and people have known and relied upon this.

Irish Life Health has indicated the largest provider of hospital services in the State to the private sector is the Health Service Executive, HSE, which now receives in excess of €620 million from private health insurance. Additionally, it is estimated that consultants working for the HSE also receive in excess of €140 million from fees generated from private work in public hospitals. Irish Life Health also indicates that the evolution of legislation within the health insurance market has led to private health insurers being forced to drive customers into public hospitals and public bed charges have created a situation where public hospitals have a financial incentive to prioritise private patients over public patients, which is morally wrong. This has created inequity for public and private patients, who in effect pay twice to receive the same service. Private patients are charged €813 per night for the same public bed or, in some cases, the same trolley. Normally, they would be seen by the same consultant they would have as a public patient. These people have paid for the service through taxation so they have a double hit. The logical conclusion is that if equity is to be achieved within the public health system, the HSE should cease providing all private health care services and concentrate services on public health. This would require additional funding for the HSE and a fundamental reassessment of the reimbursement model for consultants working within the HSE.