Joe McHugh (Donegal North East, Fine Gael)
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Question 60: To ask the Minister for Health and Children her plans to introduce risk equalisation legislation; and if she will make a statement on the matter. [10516/10]

Mary Harney (Dublin Mid West, Independent)
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Following the Supreme Court decision of July 2008, which found the Irish Risk Equalisation Scheme to be ultra vires, the Government decided to introduce an interim scheme of loss compensation. This was provided for under the Health Insurance (Miscellaneous Provisions) Act 2009, covering the period 2009 to early 2012.

In any community rated health insurance market, a comprehensive risk equalisation or loss compensation system is required in order for the market to operate in the best interests of all consumers. Without a risk equalisation or loss compensation system, insuring older or ill people will be loss making. As a result, insurers that cover a higher proportion of older people will be at a significant competitive disadvantage and insurers will seek to avoid insuring older people. It follows that, without risk equalisation or loss compensation, competition will not function properly and the market will operate counter to the interests of ill and older people. This is why it is the international norm for risk equalisation or loss compensation to apply in community rated markets.

The Health Insurance Authority has started work on preparing a comprehensive risk equalisation scheme to replace the interim scheme of loss compensation when it expires. I intend to bring proposals in this regard to the Government before the end of March.