Mary Butler (Waterford, Fianna Fail) | Oireachtas source

I am pleased to have this opportunity to address the House on behalf of the Minister for Health, Deputy Stephen Donnelly, on Second Stage of the Health Insurance (Amendment) Bill 2023. The Bill was published on 16 November and concluded its passage through the Dáil on 29 November. This is an annual, technical Bill, comprising seven sections, all of which are focused on specific areas of health insurance.

I will start with an overview of the market and the risk equalisation scheme. Currently, just under 47% of the population in Ireland hold private health insurance. This amounts to 2.48 million people and represents a total annual premium income of approximately €3.18 billion. Health insurance in Ireland is provided according to four principles, namely, open enrolment, lifetime cover, minimum benefit, and community rating. Unlike a risk-rated market in a community-rated private health insurance market, everyone pays the same price for a particular health insurance policy. Insurers cannot take into account personal circumstances, such as health status or age, in which case older and sicker people would be paying much more for health insurance than they currently do.

The risk equalisation scheme is the mechanism designed to support the objective of a community-rated health insurance market. It has operated since 1 January 2013 and is provided for under the Health Insurance Acts. Under the risk equalisation scheme, funds are redistributed in the form of credits to compensate insurers for the additional cost of insuring older and sicker members. The credits are funded by stamp duty, which is payable by health insurance providers for each health insurance policy issued. The stamp duty levies are collected by the Revenue Commissioners and are transferred to the risk equalisation fund, which is administered by the Health Insurance Authority, HIA.

The risk equalisation scheme is designed to be Exchequer-neutral. In other words, the credits are funded entirely by the stamp duties raised annually. The risk equalisation credits and stamp duty are updated on an annual basis to ensure they align with the estimates of the insured population and the type, number and cost of claims that will be made on the health insurance plans. Amendments to the health insurance legislation are required each year to update the level of risk equalisation credits and stamp duty levies necessary to fund the credits. This is the main purpose of the Bill.

The Health Insurance Authority provided the Minister with an annual report which analysed market data for a 12-month period from 1 July 2022 to 30 June 2023. This report recommended the risk equalisation credit rates and the stamp duty levies required to fund them to apply from 1 April 2024. The Minister, Deputy Donnelly, approved the risk equalisation credits to apply in 2024 and the Minister for Finance has approved the corresponding stamp duty levies.

There are three risk equalisation credits, and this Bill makes amendments to all three. This year, there will be an increased proportion of credits relating to health status, rather than age. Increasing the proportions of credit associated with health status means that more credits are based on actual claim experience, rather than risk predictors, such as age. This helps to share the risk effectively across insurers. The amendments outlined in the Bill take into account the ongoing sustainability of the private health insurance market; the aim of avoiding overcompensation being made to insurers; and the aim of having fair and open competition in the market, as is required under the EU framework for state aid.

To summarise, the Bill allows us to maintain a community-rated health insurance market. The provisions of the Bill increase the effectiveness of the risk equalisation scheme. Risk equalisation credits based on age are reallocated to those based on health status, without increasing the stamp duty payable. Increasing the proportion of credits associated with health status helps to share risk more effectively across insurers. Importantly, the programme for Government commits to retaining access to private healthcare services for people in Ireland, ensuring choice for those accessing healthcare. This Bill continues our policy of ensuring solidarity with and affordable premiums for sicker and older people. These policy aims are also supported by the public.According to a survey carried out in 2021 by the Health Insurance Authority, 79% agreed that premium prices should not be dictated by a person's current health. In the same survey, 72% agreed that older people should not be charged more for health insurance.

Private health insurance policy aims to progressively align with Sláintecare reform objectives. The Government is committed to the Sláintecare vision of a universal single-tier health and social care system. The Minister for Health, Deputy Donnelly; the Minister of State, Deputy Naughton; and I are committed to the continued delivery of Sláintecare reform and to working with the HSE to deliver this reform agenda. On behalf of the Minister, I commend this Bill to the House.