Wednesday, 9 April 2008
Voluntary Health Insurance (Amendment) Bill 2007 [Seanad Bill amended by the Dáil]: Report and Final Stages
This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 103, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration", the Minister may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. For Senators' convenience, I have arranged for the printing and circulation of the amendments. The Minister will deal separately with the subject matter of each related group of amendments. I have also circulated the proposed grouping in the House. Senators may contribute once on each grouping. I also remind Senators that the only matters which may be discussed are the amendments made by the Dáil.
I wish to apologise for inconveniencing the House and thank all Members for their co-operation in deferring this discussion from 3.30 p.m. I was launching a child and adolescent centre in Finglas and was back in Leinster House at 3.30 p.m. so I was being cautious in notifying our Whip that I might be delayed.
I am reporting back to Seanad Éireann on some minor amendments that were made in Dáil Éireann which had the broad support of all contributors in that Dáil debate. The first is the addition of definitions covering the health insurance Acts, which relate to the provisions now included in the Bill under sections 3, 4 and 5, which I will address when dealing with group 3, and also the restructuring of the initial definitions of the relevant subsidiary on the services subsidiary. The meaning of these subsidiaries is now set out within the relevant sections. The other changes made are drafting amendments covering references in the Bill to the Companies Act.
The amendments contained in this group cover minor technical issues, being amendments made on foot of consideration by the Office of the Attorney General of the initial text. Amendments Nos. 7 and 8 more accurately reference the companies and insurance Acts. Some of the amendments have been made to improve the clarity of the provisions. Amendment No. 19 puts it beyond doubt that only one health insurance subsidiary is being provided for, while amendment No. 23, having regard to the contributions made in both Houses when the issue of extending the powers of the VHI was discussed, reaffirms that the establishment of subsidiaries to engage in new activities and functions provided for under section 7(c) can only happen after authorisation has been obtained. That was one issue that was raised with us in the Dáil and we want to confirm that.
I thank the Minister of State and welcome him to the House to go through what are effectively the Final Stages of this Bill. The amendments being discussed today have been subject to a good debate in the Dáil and clarify a number of issues which we have already discussed in this House.
The Bill essentially obliges us to comply with EU law. It is looking at the issues of solvency requirements, competitiveness and effectively creating a more equal playing field in health insurance. I am interested in hearing the Minister of State's comments on recent developments where we have seen Hibernian becoming involved in this area and taking over VIVAS. What will be the implications of this in terms of the changing role of the VHI?
The Government has essentially been under pressure from the Commissioner for Internal Market and Services, Charlie McCreevy, and EU regulation in this area. Court action was threatened if certain action was not taken in respect of the VHI and there was a threat that the Government would be pursued. Given the changes brought about by this Bill, does the Minister of State now believe this threat has gone completely?
In respect of the points raised in the Dáil and Seanad, has the VHI moved to bring everything in order so that it meets the point just made by the Minister of State? Does he expect it to be fully regulated by the end of the year? The Minister put in a date as a result of some of the points previously raised in the Seanad. Could the Minister of State clarify this?
What Senator Fitzgerald has said is correct. It is important that Members of this House are aware that the health insurance market is changing, as was witnessed very recently by the purchase of VIVAS by Hibernian. It is important that the VHI is empowered to compete in the market while also ensuring that it does so on an equal footing with its competitors. It is hoped that the Bill will enable the VHI to attain authorisation as an insurer by the end of this year. The recent changes in the market highlight the need to bring forward this particular Bill. Under the Bill, we are determined and anxious that this relevant authorisation will be achieved before the end of this year.
I welcome that because, as the Minister of State said, it is important given the very high level of insurance that Irish people take out. It is important that there is confidence in the market and the various providers and that the VHI continues to provide the sort of services which it has provided very effectively for a long time.
However, it may be that those who are paying for private health insurance in this State will not be able to avail of quite the level of service they have experienced up to now given the pressures on the health service and waiting lists for both public and private facilities. This must remain a concern for many.
The Bill, when published, provided for the removal of an exemption from section 2 of the health insurance Acts for cash plan type products that also include cover for outpatient and GP services. When the Bill was previously considered here, the Minister advised the House that the change proposed would limit regulation to the minimum necessary to protect the community rated indemnity market and would enable cash plan providers to design their products so as to be exempt from the regulatory framework under section 2(a) of the health insurance Acts or to be subject to only limited regulation.
Having discussed the matter with the Health Insurance Authority and providers in the market in the interim, it was considered desirable to bring forward amendments to the sections of the health insurance Acts covering these exemptions to allow the insurers maximum flexibility while protecting the broader indemnity market. The amendments provide for the amendment of sections 10 and 12 of the health insurance Acts to ensure that contracts that relate to relevant health services — GP and outpatient type services and-or public hospital daily inpatient charges only, with no inpatient indemnity payments — will be exempt from the regulatory requirements that apply to health insurance contracts offering indemnity cover for inpatient services.
Another exemption deals with health insurance cover under an international plan sold to persons moving from one country to another on a temporary basis and which is set out in section 3(b) is being amended. The revised exemption substitutes proposed text for paragraph D of the 2001 Act. The amendments provide for the removal of a cumulative requirement currently contained in the exemption and some additional qualifications limiting exemption to temporary stays for employment purposes. That was an issue welcomed by all Members in the Dáil.
This is a technical amendment. Many Members raised the issue of having multinational companies here and having people who have health insurance products that might be deemed to be illegal, as it were, in this country, or that they would not be covered or would be exempted by the legislation. I believe this change clarifies the matter. We wanted to ensure their arrangements were not caught by our regulatory regime of risk equalisation. This amendment seems to meet the concerns highlighted in the previous debate. I am glad this is now addressed in the legislation and it seems very satisfactory. These, as it were, cash contracts will not be affected. Does it effectively mean inpatient charges cannot be covered under any circumstances if they have these contracts as appears to be the case?
I understand they will be subject to the law only if it is indemnity. I believe we had a fairly detailed debate on that relationship. The amendments provide for the amendment of sections 10 and 12 of the Health Insurance Act to ensure contracts that relate to relevant health services only, in other words outpatient-type services and GP services and-or to public hospital daily inpatient charges only with no inpatient indemnity payments, will be exempt from the regulatory requirements that apply to health insurance contracts offering indemnity cover for inpatient services, exempt if provided for in cash plans.
The bulk of the amendments to the section improve its layout and structure. While the scope of section 7 is essentially the same as that previously considered by this House, the section has been expanded by the inclusion of the term "or otherwise". It would be undesirable to restrict the manner in which the board may provide insurance financial services after authorisation has been attained. This is also a technical amendment.
The amendment clarifies that the provisions included in section 8(3) of the Bill shall also apply to the subsidiary established for the purpose of carrying on the board's health insurance business under section 10. This amendment does not encompass the provisions under section 8(1). However, it clarifies further that on establishment the activities of the relevant subsidiary shall be required to be consistent with the provisions of the VHI Acts and that it shall have the objects and powers necessary for the attainment of the principal objects of the subsidiary.
This amendment was of interest to Senator Fitzgerald. This section was added to the Bill when this House accepted an amendment tabled by Senator Fitzgerald. The change made in the Dáil reflects that it would be appropriate that VHI should report on its membership as opposed to on the overall market.
I welcome its inclusion, which is in the interest of transparency for the market. Given the dominant position VHI has had up to now and given the changes we are making to increase the work VHI can do, it would seem appropriate that that information be supplied to the Competition Authority and made available in a public way to competitors and to the media in general. It is a useful addition to the Bill and I thank the Minister of State for accepting it.
This is an interesting amendment. It effectively puts into the law and makes very clear that a State guarantee shall not be provided to enable the board or a subsidiary to raise or borrow money under this section or under any other provision of the Voluntary Health Insurance Acts. Perhaps the Minister of State could clarify if this was at the core of the EU concerns about the subsidy of Government to the VHI and infringing fair competition and competition law. It seems to deal effectively with the concerns expressed by Mr. McCreevy about the operation of the VHI and the State support it was deemed to have received over the years. It was seen as interference with fair competition. This provision will ensure that in future a State guarantee shall not be provided to enable the board or a subsidiary to raise or borrow money. I presume this provision has been written into the legislation in such a detailed way in the interest of fair competition.
This new section is broadly similar to an amendment tabled by Senator Prendergast in this House. On foot of consideration by the Office of the Attorney General, it specifies the orders to be laid before the Houses of the Oireachtas.
I thank the Leas-Chathaoirleach and all the Members of the House for facilitating me by deferring the debate by half an hour earlier this afternoon. I thank Senator Fitzgerald for her positive contribution to the debate this afternoon. Senators Fitzgerald and Prendergast contributed to the discussion on the Bill previously in this House. I thank all the Members for their co-operation.
Obviously we raised a number of concerns in the course of this debate about the evolving health insurance market here. We highlighted issues about which we were concerned, some of which centred on the database. VHI has the potential for abuse of that database given the extension of subsidiaries etc. However, now is not the time to go into those matters again. We also raised our concerns about what people buying health insurance have access to at the moment given the changed nature of health services here and some of the challenges which face the development and provision of our health services. Clearly it was imperative that the Bill be passed given the concerns expressed at EU level on competition. One would want to wish the VHI well given the very wide range of services it has provided very effectively when nobody else in the country was doing so. I thank the Minister of State and his officials for their work in drafting the Bill.
I have been sitting in here today representing Senator Feeney who is unavailable this afternoon. It is a very joyous occasion for people of Offaly and she is with them at another location. I thank Senator Fitzgerald and the Leas-Chathaoirleach, for their co-operation in this matter this afternoon. I thank the Minister of State and his officials for the smooth passage of the Bill.