Michael Kitt (Galway East, Fianna Fail)
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Question 340: To ask the Minister for Health and Children the time scale he envisages for action on risk equalisation in the current health insurance market; and if he will make a statement on the matter. [5375/11]

James Reilly (Dublin North, Fine Gael)
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The Government is committed to protecting a community rated private health insurance market through a range of measures including risk equalisation. A system of risk equalisation is particularly necessary in the Irish market because, for historical reasons, one of the insurers, VHI, has a greatly disproportionate share of older customers. VHI has a 64% share of the private health insurance market but an 82% share of the over 60 years age group and a 92% share of the over 80 years age group.

A risk equalisation scheme was put in place by legislation but following a challenge by BUPA, the scheme was struck down by the Supreme Court in July 2008. In response, a temporary scheme of tax relief/community rating levy was introduced in January 2009. This provides a significant degree of support for the cost of health insurance claims by older people. It allows insurers, with additional costs arising from insuring older people, to be compensated for up to, but no more than, 65% of a proportion of these additional costs. The scheme is designed to be Exchequer neutral and by the end of 2011 it is estimated that some €159m will have been transferred to the VHI in respect of its higher risks. This is a key action to help protect community rating pending the introduction of a full risk equalisation scheme.

The Government is preparing to put in place a risk equalisation scheme that will equalise risk as far as possible, including in relation to the key risk factors of age, health status and gender. The scheme will be designed to be legally robust and to be fully in accordance with the requirements of both Irish and European law. It will replace the existing temporary scheme and will be put in place as soon as possible.