Wednesday, 18 December 2019
Health Insurance (Amendment) Bill 2019: Second and Subsequent Stages
I am pleased to have this opportunity to address the House on the Health Insurance (Amendment) Bill 2019. As Senators will be aware, the Bill concluded its passage through the Dáil last week.
This is a short and technical Bill comprising six sections all focused on the specific issue of health insurance regulation. The provisions outlined in the Bill will ensure the ongoing sustainability of the private health insurance market and seek to keep health insurance policies at an affordable price for all citizens, young or old, sick or healthy. Over 45% of the population in Ireland hold private health insurance. Health insurance in Ireland is provided according to four principles, namely, open enrolment, lifetime cover, minimum benefit and community rating.
Open enrolment means that insurers in Ireland cannot refuse to provide cover to someone who might be a risky customer for them, and there are maximum waiting periods for pre-existing conditions. Lifetime cover means that once a person has health insurance, an insurer cannot stop cover or refuse to renew their insurance, except in very limited circumstances such as fraud. Minimum benefit means that all insurance contracts must abide by regulations issued by the Minister for Health to make sure that everyone who holds health insurance has a minimum level of cover. Community rating means that health insurers cannot alter their prices based on an individual's current or potential health status.
In order to support one of the fundamental principles of Irish health insurance, community rating, legislation is needed each year to update and revise the scheme that enables the sharing of risk across the insured population. As part of the process, the independent market regulator, the Health Insurance Authority, carries out an annual evaluation of the market, focused on the claims costs that every insurer has paid over the year. Based on that analysis, the authority recommends the level of credits and stamp duties that should apply the next year, so that risk may be shared across the market and the principle of community rating is maintained. The rates for next year, recommended by the authority, have been considered and accepted by the Minister for Health and the Minister for Finance. This year's Bill will provide for a general decrease in the credits payable in respect of those aged over 65 years, and there will be some changes in the stamp duty levies on contracts. No amendments were made to the Bill during its passage through the Dáil, the Bill is as initiated.
I will now outline the specific sections of the legislation. Section 1 defines the principal Act as the Health Insurance Act 1994. Section 2 amends section 11C of the principal Act to provide for 1 April 2020 as the effective date for revised credits payable from the fund.Section 3 amends Schedule 3 to the principal Act with effect from 1 April 2020, whereby the applicable hospital utilisation credits payable from the fund in respect of insured persons are revised. Section 4 replaces table 2 in Schedule 4 to the principal Act with effect from 1 April 2020, whereby the applicable credits payable from the fund in respect of certain classes of insured persons are revised. Section 5 amends section 125A of the Stamp Duties Consolidation Act 1999 to specify the applicable stamp duty rates for 1 January 2020 to 31 March 2020, and from 1 April 2020 onwards. Section 6 provides for the Short Title, commencement, collective citation and construction of the Bill. To summarise, this Bill allows us to maintain our support for the core principle of community rating, which is a long-established and well-supported Government policy for the health insurance market. I commend this Bill to the House.
I welcome the Minister of State. Fianna Fáil is happy to support the Health Insurance (Amendment) Bill. The Bill is something akin to a finance Bill or a social welfare Bill, in that it arrives here every November. The measures within are designed to support risk equalisation and to sustain community rating in our health insurance market in order that older citizens and people with illnesses can afford health insurance and are not discriminated against in favour of younger, healthier people. Risk equalisation and community rating is something that Fianna Fáil has always supported. There is a small increase in the levy for advanced cover, with reductions for non-advanced cover. The average annual health insurance premium increased from €935 in 2011 to €1,197 in 2018. The levy for advanced cover increased from €205 to €444 in that time.
While many people would find the health insurance area to be a bit of a minefield, I think that for many citizens who can afford health insurance, the renewal is very confusing. One could be disingenuous and say that it is deliberately constructed that way by insurance companies to confuse people about the plan they are getting. It is a criticism that I regularly get from many people. I do not know how many different plans there are and it is hard to differentiate between one plan and another. I do not know why that is. I would welcome the Minister of State's comments on that. Is there any way that we can insist on plans being more straightforward so that when people renew their health insurance or go to a different provider, the plans are more easily read in order that people can follow exactly what they are getting? I encourage people with any insurance product, especially health insurance since it has become so expensive, to shop around every year and to change provider if necessary. Sometimes we hear stories of people who get a quote from a particular insurance company. When they shop around, get a cheaper quote and go back to the original provider, lo and behold, the figure can be reduced. It goes to show the advantage of shopping around.
Very few in this country can afford health insurance and the cost seems to increase yearly. My thoughts are with those people who cannot afford it. We need to get to having a system where, regardless of whether a person is fit to pay for it, the health service should be equally accessible to all. Unfortunately that is not the case at present. I would be interested in hearing what plans the Government has to arrive at that point.
I support this Bill, the concept of community rating and whatever is necessary to strengthen community rating. The Leader mentioned on the Order of Business that car insurance premiums were coming down. I have a different experience. I had €150 extra loaded onto mine for no reason. When I checked it out with my broker, the broker said he would ring up the insurance company, and it promptly took €100 of the €150 off it. I think gouging is happening and I am afraid the Leader is out of touch. I fully accept what Senator Gallagher said. We have to have a health system whereby the consumer is entitled to shop around to get a decent bargain. We also need a bit of good faith from the insurance industry, such that it does not just rely on inertia to get a few more euro out of people who are not in a position to and are reluctant to change horses.
I thank the Minister of State for bringing forward this Bill. It is brought forward annually and is about risk equalisation. The big challenges in this area are with the growing elderly population and making sure that they can get insurance in a fair and proper manner, and that it is not loaded because of their ageing. Risk equalisation and community rating make sure that there are no excessive charges for older people. It is interesting to see how, while there may be much criticism of our health service, the average life expectancy in Ireland has increased by seven years since 2000. That is a substantial change in a short time. It means we will have more people over 65 for whom risk equalisation kicks in. I am not sure what sort of challenges that will pose for the health insurance sector.
I received a letter from the Higher Education Colleges Association. I acknowledge it is not covered by this Bill but I feel it is important that I raise this matter. The letter related to international students being unable to get a visa to come here unless they have health insurance. The Higher Education Colleges Association is concerned that while some students were coming in on insurance that would normally cover visitors, that is now being changed. There was a High Court decision and a decision by the Court of Appeal was due yesterday about whether students would be classified as ordinarily resident. The court has ruled that once they are here as a student, they are deemed as ordinarily resident. I understand from the association that the cost of health insurance for them as a result of that court decision, though I am not sure what the Court of Appeal decision yesterday was, was approximately €450 per student, which put pressure on the colleges as they tried to attract people here. I have spoken to officials in the Department and know that they are working on the matter to have a half-way house to deal with this issue. These people will not be permanently here. On average, they stay here for a period of four years and I do not think they should be penalised excessively. It is about trying to find a middle ground or half-way house for the charge that is imposed on them. If they are going to be deemed to be ordinarily resident, we should put in place a mechanism so that if they stay here for just four years, they are not be penalised by the cost of insurance. It is important that people who are to be granted visas have health insurance before the visas are granted. I think we need to find a solution to this problem. I thank the Minister of State for bringing forward this Bill.
I think this is my third time taking this Bill. It comes up every year. It is another reminder of what seems to be protection and favouring of private healthcare above all else. I know that people are afraid of entering the public system and being left to wait for months or years for treatment. Many scrape together to fund private healthcare but others simply cannot access the market. With each passing year, equity of access based on need is a missed opportunity that is detrimental to the nation's health.We all know the statistics.
Today, the Irish Nurses and Midwives Organisation, INMO, Trolley Watch measure shows there are 552 people on trolleys, which is a reduction from the all-time high reached last month. We know about the waiting lists, the cancelled operations, the cervical cancer scandal, etc. In the health landscape, there appears to be an increasing trend towards care being delivered through the private sector. This Bill does not change the role of the State as the ultimate guarantor of the realisation of our health rights and obligations, but it makes implementing that responsibility more difficult.
As I said, we deal with a version of the same Bill every year. It is about taking away the risk from insurance companies to equalise the risk for certain policyholders. Were the Government as quick to intervene in the market in other areas, we would have an improved country. We will support the passage of this Bill in order that older people and others are protected but we do so with serious reservations about our health service, which is buckling under the weight of demand. We point out that fear drives people to take out health insurance. Indeed, many patients lying or sitting comfortably in a hospital bed today, fast-tracked there via private health insurance, would acknowledge the inherent unfairness of private versus public provision. I have consistently urged the Minister, Deputy Harris, to ensure that this intervention is not used as an excuse to hike up insurance premiums. We know from the work of my colleague, Deputy Pearse Doherty, that the Government has lost the reins when it comes to the insurance sector. We must not afford the industry the opportunity to increase premiums for health insurance customers. The social justice issue in respect of health insurance is not about equity of premium but, rather, inability to pay and a chaotic public service. That is what we should be discussing. The argument is that risk equalisation benefits the ordinary person who may be sicker or more at risk than his or her neighbour but we would not need this benefit if all our citizens had access to a properly-functioning public health system.
I understand the Minister, Deputy Harris, will make an announcement on Sláintecare and its implementation in the coming days. I hope that announcement will focus on actions that will result in the implementation of the recommendations set out in the programme.
I have one problem with this Bill and I am glad that Senator Colm Burke, on the Government side, already raised it. I am sure the Minister of State will be sympathetic to our concern, which relates to the penalisation of international students. A recent Health Insurance Authority, HIA, decision fundamentally changed the medical cover system applicable to international students temporarily resident in Ireland. They are now facing a considerable increase in what they must spend on health insurance, which is unfair. If the decision stands, international students will be treated as ordinary residents for the purpose of health cover, meaning a dramatic increase in the cost of cover. International students' medical expenses insurance traditionally cost €100 to €150 per year but, as Senator Colm Burke pointed out, that cost will now rocket to €450. As international students are charged enormously increased fees compared with Irish students to study here, they are already paying a significant premium. We are the second highest charger for these services in the European Union. When the British leave the Union, we will have the distinction of being the most expensive. That is completely wrong. The Department has dealt with the situation for many years, with 200,000 students having gone through under the existing, fairer, system. I am asking the Minister to look at the possibility, at some stage, of introducing an amendment to the Health Insurance Act in order that international students are specifically left out of the definition of "health insurance contract" in the same way that other temporary residents, such as temporary workers, are omitted. It is a question of natural fairness and decency.
I thank Senators for their contributions. Senator Gallagher referred to the confusion around renewals, and he is correct, as it is something I deal with myself on a daily basis. A lot of people, when renewing their insurance, whether motor insurance, health insurance or otherwise, find it difficult to access information that would help them to comprehend prices and other options. There are more than 300 plans on the market, which is a reduction of some 30 since last year. The HIA has a price comparison tool on its website that can help consumers to choose. I acknowledge the difficulties people experience. I often think that some health insurers, who I speak to on a regular basis, do not make it simple and user-friendly for people to buy into policies they understand. It can be confusing. I will convey the Senator's remarks to the Minister.
Senators Colm Burke and Norris asked about international students, an issue which is the subject of legal proceedings. I have just been informed that there are many plans available on the market offering young adult rates starting at €180. I understand the legal proceeding is still in progress.
I will ask the Minister to come back to the Senators on that point.
I thank Senators for their support for this Bill. Its provisions are technical but they are important for all the people who want an opportunity to buy into a health insurance scheme and to have proper guidance in making their choice. Health insurance is held by a large proportion of people in Ireland relative to other countries. It is important to have taken the opportunity to discuss this Bill and the positive effect that community rating and other aspects of health insurance regulation have on people's daily lives. The Bill deals specifically with issues relating to health insurance regulation, including provisions for revised credits and the stamp duty level to apply to health insurance policies from April 2020. The voluntary health insurance scheme operates on the basis of community rating, which means that everyone pays the same price for the same product. This is supported by the scheme, which aims to keep health insurance more affordable for older and less healthy citizens. In other health insurance schemes internationally and in other insurance markets in Ireland, the level of risk presented by an individual directly may affect the premium he or she pays. We are all aware of that from our own dealings with insurers.
I thank Senators again for their support for this technical Bill. I will convey the issues that were raised by Senators Gallagher, Norris and Colm Burke to the Minister, Deputy Harris. I thank the Acting Chairman and the Cathaoirleach's office for accommodating the debate this afternoon and wish Members and staff a happy Christmas.