Billy Kelleher (Cork North Central, Fianna Fail)
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To ask the Minister for Health the way the Programme for Government pledge to reduce the costs of delivering private healthcare will be fulfilled through the health budget for 2013; and if he will make a statement on the matter. [55710/12]

James Reilly (Dublin North, Fine Gael)
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The Government is committed to keeping down the cost of health insurance so that it is affordable for as many people as possible and remains committed to protecting community rating, whereby everyone pays the same price for the same health insurance product, irrespective of age or health status. The Programme for Government contains a commitment to put a permanent scheme of risk equalisation in place. This is a key requirement for the existing private health insurance market and is designed to keep health insurance affordable for older persons and to maintain the stability of the market.

I was pleased, therefore, to recently publish the Health Insurance (Amendment) Bill, 2012 on 18 October, to give effect to a new Risk Equalisation Scheme (RES) to be applied from 1 January 2013. An effective and robust RES is required in the Irish private health insurance market in order to protect affordability for those who need it most. The Health Insurance (Amendment) Bill, 2012 is now currently before the Houses of the Oireachtas and the Scheme will take effect from 1 January 2013. The legislation provides for a range of credits to be payable to insurers on behalf of insured persons. I recently announced the rates of risk equalisation credits to apply in 2013 at the Committee Stage debate on this Bill.

The rates are funded by a stamp duty payable by all insurers in respect of each insured person. The credit is provided at source – that is, the cost of the policy is reduced by the amount of the risk equalisation credit. The measures are designed to result in no overall increase of premiums paid in the market and to spread the risk more evenly between the healthy and the less healthy, as well as the old and the young. This action is in line with plans to move to Universal Health Insurance, under which everyone will be insured for health care. A strong system of risk equalisation must be in place in order for this to be achieved. A more efficient, cost effective market will lead to greater competition and will encourage people to take out health insurance. The introduction of the Health Insurance (Amendment) Bill, 2012 fulfils the commitment made in the Programme for Government to introduce a system of risk equalisation for the private health insurance market, as we move to develop a new system of universal health insurance.

As part of Budget 2013, I announced further detail on legislation to provide for the charging of all private patients in public hospitals. Primary legislation will be introduced during 2013 to provide for charging of private in-patients in public hospitals where they are not in a designated private bed. On that basis, Budget 2013 has provided for additional patient income of €60 million in 2013. The implementation date will be announced during 2013 when the new legislation is in place. In the meantime, the maintenance charges for private in-patients in public hospitals remain unchanged. An additional €5 million in patient revenue during 2013 arises from increasing the daily in-patient charge by €5 from €75 to €80. The date of implementation will also be announced later in 2013. These measures are designed to recoup some of the cost of treating private patients in public hospitals and to generate much needed income for the public hospital system.

The Government remains committed to keeping down both the cost of health insurance, so that it is affordable for as many people as possible, and the general cost of healthcare delivery, as part of measures to ensure the sustainability of the private health insurance market in the transition to a UHI system.