Willie O'Dea (Limerick City, Fianna Fail)
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Question 26: To ask the Minister for Health his estimate for increases in premiums charged by private health insurers to customers in view of changes he announced in Budget 2012; and if he will make a statement on the matter. [1191/12]

James Reilly (Dublin North, Fine Gael)
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I am concerned that private health insurance is becoming harder to afford, especially for older people, as insurers increasingly tailor their insurance plans towards younger, healthier customers. I am strongly committed to protecting community rating, whereby older and less healthy customers should pay the same amount for the same cover as younger and healthier people.

As part of Budget 2012, the Government agreed a number of changes to charges for patients who choose to be treated on a private basis in public hospitals. These changes will have no impact on public patients, who comprise the vast majority of those treated in public hospitals.

When individuals elect to be treated privately, they agree to meet the costs of the consultant's fee and hospital's maintenance costs. These issues were examined in the Value for Money and Policy Review of the Economic Cost and Charges Associated with Private and Semi-Private Treatment Services in Public Hospitals, which was published by the Department in December 2010. It is estimated that the average maintenance cost per bed-day in a category 1 hospital is €1,046. In keeping with the long-standing policy of moving towards recovering the full economic cost of providing treatment to private patients in public hospitals, the maintenance charges for private patients in public hospitals have been increased by between 3% and 5%, depending on the category of hospital, with effect from 1 January 2012. It is anticipated that this will yield additional revenue in the region of €18 million in 2012.

While the HSE and voluntary hospitals recoup considerable sums from private health insurance companies in respect of private and semi-private treatment services provided to their members, lengthy delays often occur between the discharge of patients and the receipt of payment from the companies. This has led to an unacceptably high level of debtor days with a significant amount in fees outstanding. Some hospitals are much more efficient at collecting this income than others. It is intended that more hospitals will achieve the income collection standard of the better performing hospitals, and, as a result, a target of €50 million in accelerated income has been set for 2012.

A significant proportion of private patients who are provided with treatment by a public hospital are not currently charged for the services because of the current rules on bed designation. In contrast, the public hospitals' consultants receive private fees even where the hospital cannot collect its maintenance charge. This represents a loss of income to the public hospital system and a significant subsidy to private insurance companies. It is intended to introduce new arrangements during 2012 to allow public hospitals to raise charges in respect of all private patients in public hospitals. This new system will be entirely in keeping with the changes required as we move along the road to universal health insurance. It is estimated that this new system will yield an additional €75 million in 2012.

In December 2011 I agreed with the three commercial health insurers to establish a Consultative Forum on Health Insurance, to tackle issues of mutual concern. We agreed to work cooperatively in driving down costs related to health insurance and to identify savings that could be achieved by both public and private hospitals. I indicated to the insurers that I would be happy to hear proposals from them which would result in lower costs for the health insurance sector. In addition, a new review of the VHI's claims costs will be carried out to establish what further savings can be made. The review is be completed early this year and will contribute significantly to more effective cost control within the private health insurance market. I am determined that these and other measures will have a significant impact in containing the level of any future increases in health insurance premiums.