Written answers

Tuesday, 28 March 2017

Department of Health

Health Insurance Levy

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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418. To ask the Minister for Health to outline the way in which the levy on health insurance is used; and if he will make a statement on the matter. [15448/17]

Photo of Simon HarrisSimon Harris (Wicklow, Fine Gael)
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Risk equalisation is a mechanism designed to support the objective of a community-rated health insurance market, whereby all customers pay the same net premium (adjusted to reflect any loadings applicable under lifetime community rating) for the same health insurance product, irrespective of age, gender or health status. Under the risk equalisation scheme, credits are paid to insurers for their older and sicker members. These credits are funded directly by stamp duty levies on all health insurance contracts written. The scheme redistributes funds between insurers to meet some of the additional costs of insuring older and sicker members. The scheme is self-funding and exchequer neutral, neither a cost nor a benefit to the State.

From 1 April 2017 the age-related credits paid to insurers in respect of older people will increase to help to maintain the existing level of support for community rating. Increasing the amount of age-based credits provided under the scheme requires changes in the stamp duty levy. The levy will therefore increase by approximately 10% on all products written from 1 April onwards. It is important to note that increasing the levy does not automatically increase costs across the market. All of the monies collected are paid back to insurers in the form of credits. The amount of any increase or decrease individual insurers pass on to consumers is a commercial decision for each of them. Insurance companies operate as commercial providers and as Minister for Health, I have no legal power to intervene in relation to any insurer’s pricing strategies.

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