Michael Healy-Rae (Kerry South, Independent)
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534. To ask the Minister for Health if he will claify the position regarding health insurance (details supplied); and if he will make a statement on the matter. [41914/13]

James Reilly (Dublin North, Fine Gael)
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My Department oversees the maintenance of a competitive and sustainable private health insurance market, under the provisions of the Health Insurance Acts 1994 to 2012. Open Enrolment Regulations, made under the Health Insurance Acts, provide for maximum waiting periods for eligibility for payment under a health insurance contract, excluding payments resulting from injury or accident, in respect of first entry to health insurance and in respect of pre-existing medical conditions. They also provide for persons whose cover has ceased for less than 13 weeks to become insured again without affecting their position as regards waiting periods served, provided the same level of cover is involved. The maximum waiting periods that an insurer may apply under the legislation is as follows:

- 26 weeks, in respect of a person who is under the age of 55 years;

- 52 weeks, in respect of a person who is of or over the age of 55 years and under the age of 65 years;

- 104 weeks, in respect of a person who is 65 years and over.

These Regulations are important for a number of reasons. Firstly, open enrolment and lifetime cover provides that, except in limited circumstances specified in legislation, health insurers must accept all applicants for health insurance and all consumers are guaranteed the right to renew their policies regardless of their age or health status. Secondly, the provisions on waiting periods help to support community rating. Under community rating, everybody is charged the same premium for a particular health insurance plan, irrespective of age, gender and the current or likely future state of their health. This system requires ‘intergenerational solidarity’, where younger people pay more for health insurance than the level of risk they present would demand, while older people pay less as a direct consequence. So younger and healthier people effectively subsidise older and less healthy people, on the understanding that these younger people will themselves be subsidised by later generations when they reach old age and/or suffer ill health.

The provision of waiting periods can help to discourage individuals from only taking out health insurance later in life, thus minimising the strain placed on the community rating system and ultimately benefitting the entire pool of insured persons in the community, rather than the risks and costs on a person by person basis. In addition, the provision of waiting periods can also provide an important tool for insurers to combat practices where someone could potentially take out a health insurance policy to avail of a particular treatment and then cancel the policy once treatment had been received, without either penalty or sustained contribution to the community-rated model.