Emer Higgins (Dublin Mid West, Fine Gael)
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On behalf of the Minister for Health, Deputy Jennifer Carroll MacNeill, I am pleased to have this opportunity to address the House on the Health Insurance (Amendment) Bill 2025. This is an annual, technical Bill with eight sections, focused on the specific area of health insurance. It also seeks to make a change to the term of appointment of the chairperson of the Health Insurance Authority.

The Bill was published on 18 November and concluded its passage through the Dáil on 26 November. The Minister welcomes the support received in the Dáil for the Bill and the core principle of community rating, which is long-established and well-supported Government policy for the health insurance market. Today, 46% of the population - 2.54 million people - holds private health insurance. This represents an annual premium income of approximately €3.8 billion. Health insurance in Ireland is built on four key principles and I will briefly outline all four.

First, open enrolment means that anyone can buy a health insurance policy at any time, regardless of age, health status or medical history. Insurers cannot refuse cover because someone is older or has an illness.

Second, lifetime cover means that once you have health insurance, you can keep it for life, provided you pay your premiums. Insurers cannot cancel your policy because you become sick or in the event of making claims.

Third, minimum benefit means every policy must include a basic level of cover, set by law. This ensures that all customers receive a minimum standard of benefits.

Fourth, the commitment towards community rating means that everyone pays the same price for the same plan, regardless of age or health. Insurers cannot charge more because someone is older or has a medical condition.

These four principles are the foundation of fairness in our health insurance system. The risk equalisation scheme is a key mechanism that keeps our health insurance market fair and sustainable. In a community-rated market, everyone pays the same price for the same policy, regardless of age or health. Older or sicker people, who may cost more to insure, do not pay more. Without the support of risk equalisation schemes, insurers with more high-risk customers would face higher costs and higher premiums. In fact, premiums could rise quite sharply.The risk equalisation scheme helps to resolve this. It works by redistributing funds between insurers. Insurers who cover older and sicker members receive credits to offset their higher costs. These credits are funded by stamp duty paid by the insurer for each health insurance policy it issues. The Office of the Revenue Commissioners collects the stamp duty and transfers it to the risk equalisation fund, which is managed by the Health Insurance Authority, HIA.

There are three types of credits in the risk equalisation scheme. The first type is age-related credits, which are payments to insurers to help cover the higher cost of insuring older customers. Older people generally use more healthcare services, so their claims cost more. Without these credits, insurers with more older members would face higher costs and would likely pass these on to their members in higher premiums.

The second type is hospital utilisation credits, which compensate insurers when their members use hospital services, either for overnight stays or day cases. They help spread the cost of hospital care across the market. The third is high-cost claims credit, which is for very expensive claims. If a claim goes above €50,000 in a year, part of that cost is covered by the risk equalisation fund. This protects insurers from the impact of extremely high claims and keeps premiums stable. This Bill makes changes to all three risk equalisation credits. The proportion of age-related credits will decrease slightly, while health-related credits will increase by the same amount. Age is not always an indicator of bad health, so this change better aligns credits with actual health status.

Health insurance policies fall into two categories, advanced and non-advanced. Non-advanced contracts mainly cover treatment in public hospitals. They provide a more basic level of cover and are generally less expensive. Advanced contracts, on the other hand, offer a higher level of cover, including access to private hospitals and additional benefits. These plans cost more because they provide greater choice and flexibility for customers. There are four different rates of stamp duty, depending on whether the policy is advanced or non-advanced and whether the customer is an adult or a child. The rates for non-advanced policies and children are lower, reflecting lower levels of claims.

While increases to stamp duties may affect insurance premium costs, stamp duty is a ring-fenced contribution to the risk equalisation fund and supports the credits to enable fairness and sustainability in the private health insurance market. In addition, stamp duty is not automatically applied to each health insurance premium. Insurers decide how to build it into their pricing structures across their portfolio of policy types.

Each year, credits and stamp duties are updated to reflect changes in claims and costs. Medical inflation and private hospital costs are driving claims higher. Medical inflation simply means the amount by which the cost of healthcare is rising every year. Hospitals charge more for procedures as a result. New treatments and technologies are more expensive, and wages and operating costs continue to increase. Even if the number of claims stays the same, the cost of those claims goes up. This is one of the main reasons risk equalisation credits and stamp duties need to increase. The annual changes help to keep the system fair and sustainable. If the Government does not adjust the stamp duty rates every year, the scheme could run out of money. This could mean even higher increases to stamp duty later on or the Government having to step in to fund the scheme directly.

There is strong public support for community rating in private health insurance. The Health Insurance Authority carried out a survey this year, which showed that 64% of those surveyed agreed that health insurance prices should not depend on an individual’s health condition and 72% agreed that older people should not pay more for their health insurance.

I will now briefly outline the sections of the Bill. Section 1 confirms that the principal Act is the Health Insurance Act 1994. Section 2 sets 1 April 2026 as the date when the new credits from the risk equalisation fund will take effect. Section 3 updates the term of appointment for the chairperson of the Health Insurance Authority, bringing it in line with the code of practice for the governance of State bodies.

Section 4 increases the hospital utilisation credit, from April 2026. This means that overnight stays will rise from €163 to €165, while day cases will rise from €81 to €100. Section 5 revises the age-related credits. These credits depend on age, sex and level of cover. They will increase for all advanced products and most non-advanced products to reflect the higher number and cost of claims.

Section 6 strengthens the high-cost claims pool credit, which helps insurers cover very expensive claims. The share of costs covered will rise from 45% to 50%, for claims over €50,000 in a 12-month period.

Section 7 sets out the new stamp duty rates to fund these credits. From 1 April 2026, adult advanced plan stamp duty is going up by €48 to €517; child advanced plan stamp duty is going up by €16 to €172; adult non-advanced plan stamp duty is going up by €9 to €103; and child non-advanced stamp duty is going up by €3 to €34. These increases are calculated to keep the scheme Exchequer-neutral. An €8 million surplus in the fund will be used to reduce the level of stamp duty that would otherwise apply.

Section 8 deals with the Short Title, commencement and construction of the Bill.

In summary, this Bill ensures the continued fairness of our community-rated health insurance market. It strengthens the risk equalisation scheme and supports affordable premiums for older and sicker people, principles which are backed by the public. These amendments achieve our objectives in three ways. First, they support the sustainability of the private health insurance market by ensuring that credits and stamp duties reflect the real cost of claims. This keeps the risk equalisation fund balanced and avoids sudden shocks to premiums. Second, they prevent overcompensation to insurers. The changes to age-related and health-related credits are carefully calibrated so that insurers receive fair support from the fund. Third, they maintain fair and open competition, in line with EU state aid rules. By aligning credits more closely with health status rather than age, we improve the efficiency of the scheme.

I thank all the officials in the Department of Health who have worked so hard on this and I commend this Bill to the House.

Teresa Costello (Fianna Fail)
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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.

Maria Byrne (Fine Gael)
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I thank the Minister of State for coming to discuss this important Bill. It is all about fairness and balance. While I realise it is a very technical Bill, it is about quality of care. As the Minister of State said, almost half the people in Ireland have private health insurance and especially the older cohort. I was speaking to an older person recently who was talking about the cost of healthcare going up but said they would do everything to make sure they have it because it is so vital. It does not matter what age you are, young or old, your health is your wealth. Anyone who ends up in hospital, especially suddenly or overnight, wants to get the best level of healthcare. The Government subsidises it to keep down the cost, especially for older people, and it is about balance and fairness.

The Minister of State highlighted the whole area of stamp duty and also medical inflation. The costs are going up so it is about trying to keep down those costs. If the Government does not adjust the stamp duty rates each year, the scheme could run out of money. None of us want to see that happen, especially for the very sick and vulnerable people. There seems to be strong public support for it. Sometimes people do not realise they have an illness and it can come as a great shock. People will not be penalised regardless of whether they have minor health issues or issues which are more chronic. That is really important. On behalf of Fine Gael, we will support the Bill. It is really important to have a balanced and fair system and make as many health options open to all as we can.

Nicole Ryan (Sinn Fein)
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I welcome the Minister of State and am pleased to contribute to the debate on the Bill, the annual legislation that renews and adjusts the risk equalisation scheme which underpins our community-rated private healthcare insurance market.

Sinn Féin will support the Bill, as in previous years, and we do so while restating serious concerns about the direction of our healthcare system and the continuing reliance for so many families on private healthcare. As the Minister of State mentioned, almost half the population now hold private healthcare insurance. They pay a staggering €2.5 billion a year in premiums. This is not because people see private insurance as an optional extra or a luxury; it is because too many people simply cannot rely on the public system as it stands. We have 300,000 people waiting for scans and over 40,000 people have been waiting more than 18 months just for imaging. That is indefensible. When people are waiting months just to get a diagnosis, they understandably feel they have no choice but to pay for health insurance. That is not a sustainable or fair model of healthcare.

The truth is the Irish voluntary insurance model has for decades been facilitating a two-tier system where those who can pay jump the queue and those who cannot are left waiting. This continues to be an indictment of successive Governments’ failure to build a fully functioning universally accessible public health service.

Private healthcare is now being removed from public hospitals. That is an important and welcome step. If done correctly, this should finally increase public capacity and reduce an overdependence on private insurance. However, we need to be honest. The benefit of this change will depend on how the Government manages the transition. Increased public capacity must actually result in more productivity, more theatre time, more diagnostics, more appointments and more beds being used efficiently or else nothing will change.

The Bill adjusts credits and stamp duties in line with the annual requirements but households still face rising premiums, rising levies and rising cost pressures. The original legislation gives the Oireachtas the power to regulate the reasonable rate of profit in the insurance industry. That power exists for a reason – because the State must ensure that affordability and the public interest are not subordinate to corporate gain. The previous Government actually increased the allowable profit margin and that cannot continue unchecked.

That brings me to the amendment I have tabled. It would require the Health Insurance Authority to produce a detailed report on the rising insurance costs, the level of industry profit and the potential impacts of removing private practice from public hospitals on future premiums. The amendment does not block the Bill. It does not interfere with the risk equalisation. It simply ensures the Oireachtas has full, transparent and independent information before it as the structure of the health system changes. The HIA already publishes annual reports but this amendment would ensure that it would specifically examine the consequences for customers and not just the industry. While the removal of private healthcare from public hospitals is very positive, we must ensure that insurers cannot use it as an excuse to hike premiums. If costs go down for insurers, premiums must also go down for customers. If profits rise disproportionately, the Oireachtas must intervene. The amendment gives us the evidence base to do exactly that - to legislate if necessary and offset increased customer costs against industry profit levels and ensure no intended consequence of the system reform is allowed to quietly land on the shoulders of ordinary families. Ultimately, the long-term goal must be a public health service that is strong enough, fast enough and accessible enough for people so they no longer feel forced to buy health insurance just to access timely care. Affordable, efficient, universal public healthcare is not a radical idea - it is a standard across Europe. For too long people have been told to accept waiting lists as inevitable, but they are not. The high rate of private insurance uptake is in itself a mirror held up to Government policy. It is a reminder that the public system is failing to give people confidence and that has to change.

Therefore, while we support the Bill, we do so in the context of a system badly in need of reform and accountability. Risk equalisation, fair pricing and protecting customers are essential but, most of all, building a public health service that actually works – one where people do not have to pay twice for healthcare – must be our guiding objective. Our amendment would strengthen the direction of travel. It would also give the Oireachtas the tools and information needed to hold insurers to account and protect customers at a moment of major structural change. It is sensible, proportionate and responsible, and I urge that it be accepted. The Irish people deserve a health system they can trust without having to reach into their pockets for private insurance out of fear of endless queues.This is the challenge that is before us. It is one we must meet with urgency and ambition.

Emer Higgins (Dublin Mid West, Fine Gael)
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I thank the Senators for their contributions and their proposed amendment. Unfortunately, I must reject the proposed amendment and I will outline why.

The Health Insurance (Amendment) Bill 2025 updates risk equalisation credits and stamp duty levies for health insurance policies in Ireland. Its main goal is to adjust risk equalisation scheme to reflect yearly changes in the market. The Bill is mostly technical and is focused on keeping the scheme running smoothly. As the Senator alluded to, it comes to us every year.

The amendment before us deals with two matters and neither matter relates to the risk equalisation scheme. The first, as the Senator detailed, asks for an examination of the profits of private companies in a competitive voluntary health insurance to potentially offset rising costs against these companies' profits. This second is an examination of the potential impact of the removal of private practice from public hospitals on the cost of health insurance. I will address each individually.

First, the amendment provides that I bring forward a proposal to use the profits of commercial companies to help reduce rising insurance costs for consumers. This proposal does not relate to the maintenance of the risk equalisation scheme, so it is not relevant to the Bill. I understand the Senators have concerns following recent media reports relating to the profits of health insurance companies. While the Health Insurance Authority’s role includes monitoring the operation of the health insurance Acts and advising me on matters relating to my functions or on health insurance generally, it is not possible to interfere in a competitive market.

The Department of Health engages with the European Commission’s competition body on Ireland’s application to keep the risk equalisation scheme operating in accordance with the approval granted under state aid rules. The risk equalisation scheme sets a standard for reasonable profit for net beneficiaries of the scheme, that is, insurers who receive more from the scheme than they pay in. This is currently set at 6% and meets the European Commission’s decision on the scheme under state aid rules, which allows the scheme to operate in Ireland’s health insurance market. I also advise the Senators that the current reasonable profit rate of 6% is in the process of being reviewed as part of preparations for Ireland’s application to the European Commission for state aid approval in relation to the scheme for next year and 2027. While I understand the Senators’ concerns, beyond the European Commission approval process and administering the risk equalisation scheme, neither the Health Insurance Authority nor the Minister for Health have a role in the private health insurers’ prices or profits.

The second part of the amendment relates to the potential impact of the removal of private practice from public hospitals. This provides for a report on the potential impact of the removal of private practice from public hospitals on the cost of health insurance and for the Minister to bring forward measures to mitigate rising health insurance costs for consumers caused by the profits and the movement of private practice. I thank Senators for the proposed amendment. The issue of reducing private income in public hospitals is particularly pertinent given that this is the year the public-only consultant contract really kicks in. We have reached a critical mass of consultants on the public-only consultant contract and this is the year we expect to see it in our figures. I do not expect this to be a recurring issue. It is really important we understand that, that we keep that on track and keep in place the measure to remove private activity from public hospitals insofar as possible. In continuing to remove private activity from public hospitals, we must make sure that public funding is used for public provision, something the Senator alluded o in her contribution. We must also understand better how, with real delineation between public and private, we can better use private services in tandem with State services.

For these reasons, I cannot accept the amendment on this occasion, but the broader issue the Senators have raised is extremely important and it is something that Senator Costello touched on. As stated by the Minister for Health on the Committee and Report Stages of this Bill in the Dáil last week, the issue of the continued removal of private practice from public hospitals will be the subject of debate at the health committee. In interim, patients have to option to elect to not avail of their entitlement for free care and to use their private health insurance. That option is available to them. The practice of asking patients for their private health insurance details is now being reviewed in the context of what we just outlined in terms of the new regime.

I thank Senator Maria Byrne for her contribution. We all agree with her that our health is our wealth. That is why it is so fantastic that we have such dedicated teams working in hospitals and healthcare facilities up and down the country.

Pat Casey (Fianna Fail)
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When is it proposed to take Committee State?

Maria Byrne (Fine Gael)
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Now.

Pat Casey (Fianna Fail)
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Is that agreed? Agreed.