Seanad debates
Thursday, 30 April 2015
Commencement Matters
Health Insurance
10:30 am
Paul Bradford (Independent)
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I thank the Cathaoirleach for the opportunity to seek an update from the Minister for Health, Deputy Varadkar. Presumably, the Minister of State, Deputy Deenihan, will speak on his behalf on the response to or take-up in respect of the Government's recent decision to levy people aged over 35 who take up health insurance for the first time after 30 April 2015. I have mixed feelings about the scheme. While I appreciate that we must do everything possible to encourage people to enter the private health insurance market as part of the long-term move towards some type of universal health insurance, I have a difficulty with the concept of compulsory insurance being almost imposed on people. This is as close to compulsory as we can get.
I would be interested to know what the public response has been. The deadline is tonight. It would be helpful, even at this late stage, if the Minister would extend the deadline. There has been much public advertising, and we have been advised that there has been a significant public response, although it may not have been the response which was expected. During the past week, I have listened to many health insurance commentators speaking on the radio and, on the whole, they are in favour of the proposal. Many families are still under major financial stress and strain and it is difficult to encourage people who, for various reasons, have not taken out health insurance, to do so. It might be helpful to have flexibility on the closing date for the new terms and conditions.
While we are discussing the broad issue of private health insurance, it is fair to say that there is a level of disappointment at the abandonment of the Government's universal health insurance proposal. While it was always, perhaps, aspirational and it was a high bar to jump, it appears it is dead in the water. We must return to the drawing board regarding health insurance, given that the universal health insurance scheme figures do not seem to add up. Medical costs are still the most significant issue regarding health insurance and the health service in general. Medical costs are not being challenged and tacked sufficiently. As costs continue to escalate, it does not take a rocket scientist to confirm that health insurance costs will also rise. This has been a primary difficulty in the market during recent years. Issues such as insurance claims and medical insurance costs are part of the mix. The Minister, Deputy Varadkar is still relatively new to the job and is, presumably, working day and night to get a hold on it. However, the Department of Health and its problems have been with us for so long that we sometimes despair that change and progress is so slow.
Could the Minister of State confirm the level of take-up and what it means? What about the people who cannot afford to take out even the most basic policies on offer? It is pertinent to advise people that some of these very basic packages are health insurance in name only and offer very few benefits. While I understand why the Government felt community rating had to be defended in this fashion, there are other issues from the point of view of competition in the market and, above all, the costs of medical care, medical provision, medical insurance and medical claims, and these must be part of the solution. I look forward to the Minister of State's update on the take-up of health insurance under the scheme.
Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
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I am taking this debate on behalf of the Minister for Health, Deputy Varadkar, who is on Government business elsewhere and regrets that he cannot be here. I thank the Senator for raising the issue as it gives me an opportunity to update the House on this important matter. Community rating, reflecting the principle of intergenerational solidarity, is a fundamental cornerstone of the health insurance system. This means people who are old or sick do not have to pay more than the young and well. Under community rating, the level of risk that a particular consumer poses to an insurer does not directly affect the premium payable. For community rating to work, we depend on a constant influx of younger, healthy people taking out health insurance to help keep premium prices down for everyone. This is why lifetime community rating is being introduced, to encourage people to take out health insurance at a younger age, thereby helping to spread the costs of older and less healthy people across society. This helps to support affordable community-rated premiums for everyone who wishes to purchase health insurance.
From tomorrow, there will be late entry loadings for those aged 35 and over taking out health insurance for the first time. The loadings are set at 2% per year starting at age 35, up to a maximum loading of 70% at age 69 and over. Crucially, people of all ages can avoid loadings by taking out health insurance before the end of the grace period at midnight tonight. Since the start of March, the Health Insurance Authority has been running a public information and awareness campaign around lifetime community rating to publicise this significant change. The campaign includes a nationwide advertising campaign in the run-up to the 30 April deadline, running across various separate media platforms including television, radio, print and the Internet, to reach as many people as possible and to inform the public of the impending change. In addition, the insurers have been running their own individual media campaigns to inform the public and have developed web-based information tools to provide any additional information required.
Following the expiry of the grace period, there are exemptions available to help limit the level of loadings that can apply.Previous periods of health insurance cover are taken into account in calculating the loading that may apply. In addition, a credited period, in total not exceeding three years, is also available for individuals who previously had health insurance but relinquished cover since 1 January 2008 due to unemployment. In such cases, the level of loading will be reduced by the relevant credited period or periods.
The Health Insurance Authority will have updated market figures for the April to June period available at the end of July. However, insurers have confirmed high levels of Internet traffic and telephone contact from people as the grace period draws to a close, and the insurance companies are confident that they are fully ready to deal with any last minute upsurge, with telephone lines open late all this week. Any increase in the number of younger insured persons will have a positive impact on the market as a whole. In addition, the measure will also encourage people to retain health insurance once they have it, which in turn will help to keep premium prices down for everyone.
Paddy Burke (Fine Gael)
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I will take a brief question from the Senator.
Paul Bradford (Independent)
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To repeat the point I made earlier, even at this late stage the Minister should consider an extension of the deadline. It is something we see across many Departments in respect of many schemes that the deadline is extended at the last minute. I would not expect to hear from the Minister at this hour of the last day. If we are genuinely attempting to encourage as many people as possible to take out health insurance, and if by extending the deadline by a week or a fortnight, another 2,000, 3,000, 5,000 or 10,000 people would do so, that would be a help. I ask the Minister of State to impress on the Minister the need to consider an extension of the deadline because, notwithstanding the telephone calls and the Internet traffic, early indications appear to be that the take-up is not as significant as had been expected. That could be wrong and, as the Minister of State has said, the figures will not be available until the end of July, but there is no harm in considering a short extension of the deadline. The Minister of State does not have to respond but I simply ask him to convey my strong request in that regard to the Minister for Health, Deputy Leo Varadkar.
Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
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I will certainly convey the Senator's request to the Minister. I wish to draw to the Senator's attention a press statement the Minister issued on Tuesday last, in which he confirmed there will be no extension of the deadline. It is important that we all appeal to people to be mindful of the deadline. As we know and appreciate, the more young people who take out insurance, the less of a liability there will be on the older generation. In time everyone will experience that stage of life and will depend on younger people to help them. It is very important that people abide by the deadline to take out insurance before it expires.