Robert Dowds (Dublin Mid West, Labour)
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564. To ask the Minister for Health the reason he is encouraging persons under 35 years of age who can afford private health insurance to do so before 30 April 2015. [11203/15]

Leo Varadkar (Dublin West, Fine Gael)
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Community rating, reflecting the principle of intergenerational solidarity, is a fundamental cornerstone of the Irish health insurance market. 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 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.

The policy objective of introducing Lifetime Community Rating (LCR) is to encourage people to purchase health insurance at a younger age, as community-rated markets depend on a continuing influx of younger people to keeps premiums down for everybody. LCR, which is being introduced from 1 May 2015, modifies community rating so that the premium that individuals pay for health insurance increases with the age at which they enter the private health insurance market. The premium does not vary in relation to their current age. For example, under LCR a 50 year old who has held insurance since he or she was 30 will continue to pay the same as a 30 year old, but a 50 year old who purchases insurance for the first time will pay more than a 30 year old. If you take out private health insurance earlier in life, and retain it, you will pay lower premiums compared to someone who joins when they are older.

The introduction of LCR will encourage more people to join the market at younger ages, thus helping to spread the costs of older and less healthy people across the market and helping to support affordable community-rated premiums for everyone.