Jim Daly (Cork South West, Fine Gael)
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Question 202: To ask the Minister for Health the number of persons availing of private health insurance for each of the past five years in each of the following age groups, 20 to 30 years, 30 to 40 years, 40 to 50 years, 50 to 60 years, 60 to 70 years, 70 to 80 years, 80 to 90 years; and if he will make a statement on the matter. [23578/12]

Jim Daly (Cork South West, Fine Gael)
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Question 204: To ask the Minister for Health the number of persons that are subscribed to private health insurance that are in employment and that are in receipt of welfare payments; and if he will make a statement on the matter. [23580/12]

James Reilly (Dublin North, Fine Gael)
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I propose to take Questions Nos. 202 and 204 together.

The number of insured persons with inpatient private health insurance, for each of the past five years and broken down by age group, are contained in the following table:

NUMBER OF INSURED PERSONS 2007 TO 2011

The above data refer only to the three open market insurers of Aviva Health, Quinn Healthcare and VHI Healthcare and the figures are the average numbers insured in each calendar year.

Information in respect of the number of individuals holding private health insurance broken down by the numbers in employment or in receipt of social welfare payments is not available or collected on a national basis. However, the Health Insurance Authority is the statutory regulator of the private health insurance market and undertakes consumer surveys from time to time. The most recent such survey was carried out in May 2010 and while it did not cover the entire population of insured individuals, it was a national consumer survey with just over 1,000 respondents. Quotas were set on age, sex, social class and region in order to be representative of the adult population in the Republic of Ireland. The survey revealed that 61 percent of those surveyed considered themselves employed, 16 percent were retired, 12 percent were home makers, 6 percent were students and 5 percent were unemployed.

Jim Daly (Cork South West, Fine Gael)
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Question 203: To ask the Minister for Health if his attention has been drawn to the fact that the Government levy is being passed on to customers by insurers and clearly being levied on the invoice as a Government charge. [23579/12]

Jim Daly (Cork South West, Fine Gael)
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Question 206: To ask the Minister for Health his views in relation to health insurance companies passing on the health insurance levy to customers who may not be in a tax bracket to reclaim it, who may recently have joined the welfare system and are endeavouring to continue to pay their insurance and save the State from any potential cost of ill health for them; and if he will make a statement on the matter. [23582/12]

James Reilly (Dublin North, Fine Gael)
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I propose to take Questions Nos. 203 and 206 together.

I am strongly committed to protecting the principle of community rating in the private health insurance market. Community Rating means that the level of risk that a particular consumer poses to an insurer does not directly affect the premium paid. It also means that premiums for younger or healthier lives are typically higher than their expected claims would require, whereas for older or less healthy lives, premiums are typically lower than the expected claims would require. It is also useful to note that older people who have been paying health insurance premiums for many years will have supported the older generation when they were younger and could reasonably expect to benefit in a similar way as they themselves now become older.

Community Rating needs a robust system of risk equalisation. Otherwise insurers will have a strong incentive to avoid older customers. Instead they will have a clear incentive to attract and retain only healthy customers who are less likely to make claims. The Interim Scheme of Age-Related Tax Credits and Community Rating Levy was introduced in 2009 in order to provide direct support to community rating. It achieves this by way of a mechanism which provides for a cost subsidy from the young to the old.

The Interim Scheme provides that health insurers receive higher premiums in respect of insuring older people, but that older people (in six age bands ranging from 60-64 yrs to 85 yrs +) receive an age-related tax credit equal to the amount of the additional premium so that all people continue to pay the same net amount for a given health insurance product. The Scheme is funded by an annual levy on health insurers based on the number of lives insured by them. The Scheme is designed to be Exchequer neutral, neither a cost nor a benefit to the State. The tax credit is provided as a tax relief at source – that is, the cost of the policy is reduced by the amount of the age- related income tax credit.

It is a matter for the insurance companies as to the extent, if any, they pass the levy on to their clients. Earlier this year I welcomed the announcements by both Aviva Healthcare and the VHI that they did not envisage passing an increase on to customers' premiums on foot of the revised rates of Age-Related Tax Credit and Community Rating Levy for 2012. I am disappointed that AVIVA increased their prices subsequently in May when they attributed the rise in premium to the levy increases.

The age- related tax credit is separate and additional to the standard rate income tax credit which has traditionally been provided by Government to persons holding health insurance policies. In relation to those with incomes exempt from income tax who have health insurance cover, I can confirm that they also benefit from tax relief at the standard rate. For example, an insurer may set the price for a particular plan at €1,000. It will then deduct 20% ( €200 in this case) in respect of tax relief at the standard rate and charge each customer, irrespective of their taxpayer status, a net amount of €800. The insurer will then claim the tax relief amount of €200 from the Revenue Commissioners.

Finally in relation to information provided to policy holders, Section 9 of the Health Insurance (Miscellaneous) Provisions Act, 2009, obliges insurance providers to issue a statement to the policy holder in writing setting out: the premium payable under the contract in respect of each insured person before any deduction from premium (including tax relief at source and age related tax credits), and the net premium under the contract in respect of each insured person.

Jim Daly (Cork South West, Fine Gael)
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Question 205: To ask the Minister for Health if his attention has been drawn to the fact that the cost of private health insurance has increased by 300% in the past five years; his plans to address the spiralling cost of insurance; and if he will make a statement on the matter. [23581/12]

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. There can be little doubt that price increases will make it more difficult for persons who hold private health insurance to renew their policies. While there has been a decrease in the numbers with private health insurance, by 76,000 in the year to end-March 2012, it is important to note that the decline in private health insurance coverage is modest to-date, at less than 4% of the overall market. This leaves some 2.139 million, or 46.6% of the population, covered by private health insurance. Even in the current difficult financial climate, the vast majority of consumers with private health insurance are retaining some level of health insurance cover.

Provisions in the relevant health insurance legislation ensure switching is as easy and seamless as possible for customers. Many have tended to choose cheaper alternative plans, rather than leaving the market altogether. Consumers have a legal right to switch between or within insurer to get better value and to reduce their premium costs. The evidence to date is that many people are changing their product choice or insurer following significant price or product changes. It is not open to a company to refuse a customer of another insurer the same level of cover. All plans are available to all customers, regardless of whether you are an employee of a particular organisation or not. Policy holders can switch to the same level of cover without waiting times for cover to apply.

In addition to the choices available to consumers in the health insurance market, the Government's clear objective is for the health insurance market to remain as competitive and affordable as possible, as we move towards a new system of Universal Health Insurance. I am focusing on addressing the problems of the current private health insurance market, where insurers have a considerable financial incentive to cover younger, better risks than older, poorer risks. 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. In order to keep down the cost of health insurance for older people, I was pleased to increase significantly the age-related income tax credit for insured persons aged 60 years and over, from 1 January 2012. Without this support, health insurers would have had a strong financial incentive to 'segment' the market by offering policies targeted at young people, to the disadvantage of older customers.

In addition, I am keen to explore other available measures to limit the costs related to health insurance. I have agreed with the three commercial health insurers to establish a Consultative Forum on Health Insurance, to tackle issues of mutual concern. This Forum has been established with a focus on generating ideas which would help address health insurance costs, and the insurers have 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. Bilateral meetings have taken place with each insurer where they have brought forward their own ideas for cost savings in the market. The Forum will also give a voice to the insurers in the development of the new Universal Health Insurance model. I have also made it clear to the health insurers that I believe that significant savings can still be made, the effect of which can be to minimise the need for increases in premiums. In this regard, VHI has commissioned consultants to carry out a utilisation management review of their claims. The review has commenced and will provide a detailed report on the advantages and disadvantages of moving towards greater utilisation management, a cost benefit analysis and a detailed plan on how this might be achieved including the timelines involved, costs and potential savings, if any, that could be achieved.

It is my intention to ensure that the private health insurance market is reformed to ensure that costs are reduced and that there is a more even balance across the market. I am determined that the measures outlined above will have a significant impact in containing the level of any future increases in health insurance premiums.