Willie O'Dea (Limerick City, Fianna Fail)
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Question 25: To ask the Minister for Health if his attention has been drawn to the fact that private insurers are designing policies to be less attractive to older persons and thereby evading community rating policies; and if he will make a statement on the matter. [24301/12]

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 sicker customers should pay the same amount for the same cover as younger and healthier people. 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 Scheme is designed to be Exchequer neutral, neither a cost nor a benefit to the State.

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.

The Health Insurance Authority (HIA) is the statutory regulator of the private health insurance market and provides information to consumers regarding their rights and also on health insurance plans and benefits. The HIA plays an important role for customers, both in ensuring that they have accurate information, and in enforcing the implementation of the law protecting consumers in relation to health insurance and where appropriate it issues enforcement notices to enforce compliance with the Health Insurance Acts. The HIA can be contacted on lo-call number 1850-929166. The HIA's website www.hia.ie has a useful plan comparison tool which assists in finding suitable and competitive health insurance plans.

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.

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. Under Universal Health Insurance, everyone will be insured for health care and the current unfair discrimination between public and private patients will be removed.