Martin Heydon (Kildare South, Fine Gael)
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178. To ask the Minister for Health if he will address the concerns that many persons have regarding recent changes to the private health insurance market (details supplied) which will cause increases in the private health insurance premia; and if he will make a statement on the matter. [51284/13]

James Reilly (Dublin North, Fine Gael)
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I am determined to address rising unsustainable costs in the sector in the interests of consumers. I want insurers to address the base cost of each element of claims which they pay and have made it clear to private health insurers that I believe significant savings can be made, ultimately reducing the impact of rising health costs on health insurance premiums for the consumer. Earlier this year, I appointed Mr. Pat McLoughlin to prepare an independent report on how best to achieve real cost reductions in the private health insurance market, having full regard to competition law. I expect to receive an initial report from the Chair very shortly.

Risk equalisation compensates for the costs of insuring older customers and I am committed to progressively increasing the extent of this compensation. The Health Insurance (Amendment) Bill 2013, currently progressing through the Oireachtas, sets out revised risk equalisation credits and the corresponding stamp duties that will apply under the Risk Equalisation Scheme from 1 March 2014. Different risk equalisation credits will apply to 'advanced' and 'non-advanced' health insurance policies. There will be no change to the stamp duty payable on lower cost 'non-advanced' health insurance, which will help to ensure that the option of lower cost health insurance remains available. The stamp duty for health insurance products providing 'advanced' cover will increase from €350 to €399 per adult and from €120 to €135 per child.

It is important to note that the stamp duty, or levy the Deputy refers to is collected from all health insurers and is in respect of the number of lives insured by them, and is not placed on individual policy holders. The money collected is used to fund RE credits for older people with private health insurance who, if under a risk rated model of insurance, would be charged a higher premium for health insurance than younger people, given their higher risk profile. Funding the RE credit for older people ensures that everyone 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. It is a matter for the insurance companies as to the extent, if any, they pass the stamp duty on to their customers.

The Health (Amendment) Act, 2013 (No. 31 of 2013) provides for the introduction of a revised private in-patient charge for all private patients in public hospitals, including those accommodated in public beds. All persons ordinarily resident in Ireland are entitled to use a public hospital. However, some people choose to be treated privately, in which case they have chosen to pay the consultant and the hospital. The Government believes that users of private services should pay for the costs of providing those services. The Comptroller and Auditor General has reported that 45% of in-patients treated privately by their consultants were not charged for their maintenance costs because they were not occupying private-designated beds. This situation represents a significant loss of income to the public hospital system and an indirect subsidy to private insurance companies, who cover most private patients. I believe that this situation cannot continue and that the new charge makes sense.

From 16 October 2013, tax relief for medical insurance premiums has been restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings will no longer qualify for tax relief. The new ceilings will ensure some continuing support via the tax system for those who purchase private medical insurance policies, while reducing Exchequer exposure to more expensive policies. This will affect some consumers, depending on the cost of the policies that they purchase. While individuals can of course opt for less expensive policies and therefore avoid the impact of this measure entirely, it is important that they fully understand the level of cover their policy provides.

Many consumers can make savings on their health insurance premiums by reviewing the level of cover to ensure that their needs are being met, without being over-insured. The Health Insurance Authority provides information to consumers regarding their rights and also on health insurance plans and benefits. The HIA's web-site, www.hia.ie, has a useful plan comparison tool which assists in finding suitable and competitive health insurance plans.

The Government remains committed to keeping down the cost of private health insurance, so that it is affordable for as many people as possible as part of measures to ensure the sustainability of the private health insurance market in the transition to Universal Health Insurance.