Mary Butler (Waterford, Fianna Fail) | Oireachtas source

I am pleased to have this opportunity to address the House on the Health Insurance (Amendment) Bill 2021

This Bill was published on 1 December and concluded its passage through the Dáil on 8 December. I welcome the support received in that House for the core principle of community rating, which is long-established and well-supported Government policy for the health insurance market. Our community-rated health insurance market means that the cost of health insurance is shared across all members of the market.

This is a short and technical Bill that is comprised of nine sections that all focus on the specific issue of health insurance. This legislation is required each year to revise the parameters of the risk equalisation scheme, which is a financial mechanism that supports our community-rated health insurance market. The risk equalisation scheme requires state aid approval from the European Commission to function as part of the private health insurance market. The current scheme was approved in 2016 with similar schemes approved and in operation in Ireland since 2003. To date, the scheme has been considered a state aid that is compatible with the Internal Market by the European Commission. The current scheme is approved to operate until 31 March 2022. Negotiations are at an advanced stage with the European Commission for the new scheme and are expected to be finalised shortly.

In addition to the general amendments, this year’s Bill provides the legislative basis for enhancements to the scheme. These have been developed with relevant stakeholders in the market, including the Health Insurance Authority and the insurers, and negotiated and finalised with the European Commission.

I will now outline the specific sections of the Bill. Section 1 defines the principal Act as the Health Insurance Act 1994.

Section 2 amends section 6A of the principal Act to include high-cost claim credits, which the insurer is entitled to have paid on behalf of an insured person. Section 3 amends section 7E of the principal Act. It provides that the Minister may require the Health Insurance Authority to furnish a report relating to the high-cost claims credit parameters. Section 4 amends section 7F of the principal Act to provide for an updated reasonable profit figure. Section 4 also provides for the transitional arrangements for how it is to be applied for the three-year periods 2020-22 and 2021-23. The benchmark is increasing from 4.4% to 6%.

Section 5 amends section IIC of the principal Act to provide for a new effective date for revised age-related credits payable from the risk equalisation fund. It also introduces a time limit on all credits that can be claimed from the fund. Section 6 replaces table 2 in Schedule 4 to the principal Act. This table provides for age-related credits which are payable for insured people over the age of 65. These new credits would be payable from 1 April 2022.

Section 7 amends the principal Act by the addition of Schedule 5, which provides the parameters for high-cost claims. Section 8 amends section 125A of the Stamp Duties Consolidation Act 1999. This will specify the stamp duty rates that will apply for 2022. Of note, it provides for a reduction in the stamp duty levy applicable to health insurance contracts from 1 April 2022. Section 9 provides for the Short Title, commencement, collective citation and construction of the Bill.

The provisions in the Bill relating to the introduction of high-cost claims credits and the amendment of the benchmark for reasonable profit are subject to approval with the European Commission under state aid rules. The commencement of these provisions will be by ministerial order.

To summarise, this Bill allows us to maintain the community-rated health insurance market. The provisions of the Bill will increase the effectiveness of the risk equalisation scheme, which is a fundamental support to the market.

I would like to conclude by highlighting this Government’s commitment to improving public health services under the Sláintecare programme. As access to these services improves, the proportion of people who hold health insurance may decrease over time. Importantly, the programme for Government also commits to retaining access to private healthcare services for people in Ireland thus ensuring choice for those accessing healthcare. While such a high proportion of people hold health insurance across Ireland, it makes sense to maintain the community-rated health insurance market.

I commend this Bill to the House.