Teresa Costello (Fianna Fail)

I welcome the opportunity to speak on the Health Insurance (Amendment) Bill 2025. Fianna Fáil will be supporting this legislation. As with the Finance Bill or the Social Welfare Bill, this measure arrives annually to update the framework that sustains risk equalisation and preserves community rating in our health insurance market. Community rating is a core principle of our system. Everyone pays the same premium for the same policy, regardless of age or health status. The risk equalisation scheme is what makes that possible. It ensures that older citizens and those living with illnesses are not priced out of cover or discriminated against in favour of younger, healthier people.

The stamp duty applied to health insurance contracts does not flow to the Exchequer. It is collected and ring-fenced for the risk equalisation fund, which is redistributed to insurers in the form of credits. Those credits compensate for the higher cost of covering older and less healthy individuals and they keep the market stable and fair.

This year's Bill provides for increases to the levy on both non-advanced and advanced policies. These adjustments are essential. If levies and stamp duty do not keep pace with rising claim costs and demographic pressures, the risk equalisation scheme becomes vulnerable. An underfunded scheme risks undermining community rating, distorting the market and placing disproportionate financial pressure on insurers with older or higher risk customers. That would run contrary to the very purpose of the scheme.

Ireland's risk equalisation scheme operates within a community-rated, voluntary, private insurance system and must be periodically approved by the European Commission as a form of state aid. Approval was granted in March 2022 for the scheme to operate until March 2027. Each year, this legislation is required to update the levels of credits and stamp duties, in line with actuarial evidence and the recommendations of the Health Insurance Authority.

The key changes to credits and stamp duty in this Bill are as follows. Age-related credits will increase for most people aged 65 and over, particularly those with advanced policies. The hospital day case credit rises from €81 to €100 and the overnight stay credit from €163 to €165. The high-cost claims credit will now reimburse insurers for 50% of claims above €50,000, up from €45,000. Stamp duty rates will also rise for advanced contracts. The rate for those aged 17 and under will increase from €156 to €172 and for adults, it will rise from €469 to €517. For non-advanced products, the levy will increase from €31 to €34 for those aged 17 and under and from €94 to €103 for adults.

These adjustments reflect medical claims inflation in 2014 and a higher projected private hospital inflation rate, revised from 5% to 8%. While insurers may reflect these increased levels in their premiums, stamp duty remains a cornerstone of the risk equalisation scheme. Without these contributions, the credits that allow insurers to cover higher risk individuals without charging them more could not be sustained.The alternative would be a breakdown in community rating and a shift towards age-based and risk-based pricing, something this Oireachtas has consistently rejected.

The Bill also contains an important governance change. It amends the term of appointment for the chairperson of the Health Insurance Authority. Under the code of practice for the governance of State bodies, board members should serve a maximum of eight years. The current legislation only allows a chairperson to be appointed for a five-year term, meaning they cannot be reappointed without breaching the eight-year limit. This Bill will allow appointments of up to five years, giving the Minister flexibility to align the chairperson’s tenure with the code, for example through a five-year term followed by a three-year term. This mirrors the existing arrangements for ordinary members of the authority. The term of the current chairperson is unaffected.

Today, 2.53 million people hold private health insurance, representing 46.3% of the population. When revising credits and stamp duties, the Health Insurance Authority must balance several considerations: protecting community rating; avoiding overcompensation; sustaining the market; supporting fair competition; and avoiding surpluses or deficits from year to year. The legislation before us does not introduce new policy. It simply updates the scheme in line with the authority’s recommendations, based on expected claims costs and market conditions for the 2026 to 2027 period. The risk-equalisation scheme remains Exchequer neutral. Stamp duty levies are set to fully offset the cost of credits. Any surplus or deficit is carried forward and factored into subsequent years’ calculations. The integrity of this mechanism is vital to the functioning of a fair and accessible health insurance market.

This Bill continues the annual work required to protect community rating and uphold equity within private health insurance. By supporting it, we are reaffirming the principle that older people and those with greater health needs must not face prohibitive premiums. The update is technical but its impact is fundamental: a stable system, a fair distribution of risk, and protection for those who depend most on health insurance.

I have just one question that I wish to raise. I have observed that patients in a public hospital receiving public care are often offered an option to sign for a private health insurance claim. I do not understand that when they are not getting private care. I would like an answer on that to see why a patient receiving public care would be asked to do that.