Mary Butler (Waterford, Fianna Fail) | Oireachtas source

The celebrations over the last few months have been very timely. I was honoured to see the portrait downstairs of Tras Honan who is a Waterford woman and is originally from County Clare. She was the first ever female Cathaoirleach of the Seanad and it is fitting to mark her achievement. I say well done to the Cathaoirleach on all of his work and all the support he got from Members.

I am pleased to have this opportunity to address the House on the Health Insurance (Amendment) Bill 2022. The Bill was published on 24 November and concluded its passage through the Dáil on 7 December. I welcome the support received in this House for the Bill and the core principle of community rating, which is a long-established and well-supported Government policy for the health insurance market.

Currently, over 46% of the population in Ireland hold private health insurance. This amounts to 2.4 million people and represents a total annual premium income of approximately €2.97 billion. Health insurance in Ireland is provided according to the four principles of open enrolment, lifetime cover, minimum benefit and community rating. In our community-rated health insurance system, customers are not charged based on their risk profile. This means that the premium charged for a particular health insurance product is the same for everyone. Insurers cannot take into account personal circumstances like health status, risk or age in which case older and sicker people would pay much more for health insurance than they currently do.

Risk equalisation is a mechanism designed to support the objective of a community-rated health insurance market. The risk equalisation scheme has operated in the health insurance market since 2013 and is provided for under the Health Insurance Acts. Under the risk equalisation scheme, insurers receive risk equalisation credits from the risk equalisation fund to compensate for some of the additional costs of insuring older and less healthy members. The risk equalisation scheme is a carefully calibrated and highly complex scheme. Risk equalisation credits are funded by stamp duty levies. The levies are payable by health insurers on all health insurance contracts written and are paid into the risk equalisation fund. The risk equalisation scheme is designed to be Exchequer-neutral. It is not funded by the State, nor does the State derive any funds from it. None of the stamp duties on health insurance contracts go to the Exchequer. They are all used to fund the credits.

This is an annual technical Bill comprising eight sections, all of which focus on the specific area of health insurance. A health insurance Bill is necessary each year to update the amounts of risk equalisation credits paid to insurers and the stamp duty levies required to fund them. The rates of credits and levies are based on recommendations from the Health Insurance Authority, HIA, following an evaluation and analysis of health insurance claims. The Minister for Health has approved the risk equalisation credits to apply in 2023 and the Minister for Finance has approved the corresponding stamp duty levies. As the risk equalisation scheme is deemed to be State aid, it must be approved by the European Commission. It was duly approved in March 2022 to operate until March 2027.

In addition to the standard technical amendments, this year's Bill provides for the specification of the end date of the act of entrustment. This is the legislative mechanism under which the risk equalisation scheme operates. This is a requirement of the European Commission as part of its approval of the risk equalisation scheme earlier this year. The end date of the act of entrustment should be viewed as a technical end date required under European law. This date matches the duration of the Commission's approval of the operation of the risk equalisation scheme. The Bill provides for the Minister to specify a new date after consultation with the European Commission and the Minister for Finance.

The Bill makes further provision for the appointment and powers of authorised officers of the HIA, thus strengthening the enforcement powers of the authority in carrying out its role as regulator of the private health insurance market. 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 the principal Act by inserting a new section 6B, which specifies the end date of the act of entrustment - the legislative mechanism under which the risk equalisation scheme operates - as required by the European Commission as part of its approval of Ireland's risk equalisation scheme. The end date for the period of entrustment should be viewed as a technical end date, which is required under European law. This section provides for an order-making power for the Minister to specify a new date after consultation with the European Commission and the Minister for Finance. This power will provide the Minister with the authority to extend the duration of the period of entrustment in exceptional circumstances to ensure the continuity of the risk equalisation scheme.

Section 3 amends section 11C of the principal Act to provide for 1 April 2023 as the new effective date for revised credits payable from the risk equalisation fund.

Section 4 amends section 18E of the principal Act by making further provision for the appointment of authorised officers of the HIA. The amendments outline in more detail who may be appointed as an authorised officer and when the appointment may cease.

Section 5 amends section 18F by extending the current legislated enforcement powers to non-registered businesses purporting to be carrying on health insurance business in Ireland. This amendment bridges a limitation of the existing legislation which permits investigation of registered undertakings. Again, this section follows, insofar as possible, the Central Bank (Supervision and Enforcement) Act 2013, as amended.

Section 6 replaces table 2 in Schedule 4 of the principal Act. This table revises the applicable risk equalisation credits payable from the risk equalisation fund in respect of certain classes of insured persons. The amounts are applicable on or after 1 April 2023. The Bill provides for a decrease in the age-related risk equalisation credits payable across approximately half of the age groups over 65. These decreases are to facilitate the redistribution of high-cost claims credits, which results in a more targeted distribution of credits based on health status rather than age.

Section 7 amends section 125A of the Stamp Duties Consolidation Act 1999 to specify the stamp duty rates to apply to the market in 2023. The amount of stamp duty levy is calculated to offset the costs associated with the payment of risk equalisation credits. The HIA recommends the amount of stamp duty levy to the Minister each year, having regard to the risk equalisation fund. For next year, the stamp duty payable on non-advanced health insurance contracts from 1 April 2023 will be €109 per adult. This is a decrease of €12 from 2022 rates. The rate per child will be €36, which represents a decrease of €4. On advanced health insurance contracts, the stamp duty will be €438 per adult. This is an increase of €32 from 2022 rates. The rate per child will be €146, which represents an increase of €11. A surplus of €55 million, or 7% of the fund, is expected next year as there was a lower level of claims on the fund than anticipated. The HIA recommended that this €55 million should be used to reduce the amount of stamp duty to be charged from 1 April 2023. The rates of stamp duty payable incorporate the €55 million surplus. This surplus has built up because of lower claims due to lower levels of hospitalisations as a result of Covid-19, and an increase in expected stamp duty receipts due to higher numbers of people entering the health insurance market than had been projected.

Section 8 provides for the Short Title, commencement, collective citation and construction of the Bill.

While the Government continues to maintain the community-rated private health insurance market, I will conclude by highlighting its commitment to improving public health services under the Sláintecare programme. As access to these services improves, the Department will monitor the impact on the health insurance market over time. I commend this Bill to the House.