Brendan Griffin (Kerry, Fine Gael)
Link to this: Individually | In context | Oireachtas source

360. To ask the Minister for Health his views on a matter regarding private health insurance (details supplied); and if he will make a statement on the matter. [15061/17]

Simon Harris (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy raises two separate issues in the question. The first concerns the community rating levy on health insurance contracts and the second matter raised concerns charges for private patients in public hospitals.

With regard to the first matter, 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.

Regarding the second issue, the Health (Amendment) Act 2013 provides for the charging of all private inpatients. This Act addressed a situation identified by the Comptroller and Auditor General in his 2008 report whereby when a private inpatient was accommodated in a public or non-designated bed, no private inpatient charge applied. The report noted that 45% of all private inpatient throughput was not the subject of a maintenance charge because the patient was accommodated in a designated public bed. A further 5% was not charged for because the patient was accommodated in a non-designated bed, with the result that only 50% of private inpatient throughput gave rise to any maintenance charge at all. This was despite the fact that due to treatment costs, the type of room in which a patient is accommodated is by no means the major contributor to the overall costs of a hospital stay.

The absence of a maintenance charge in such instances represented a significant loss of income to the public hospital system, to taxpayers and was an indirect subsidy to private insurance companies, which cover most private patients. The charging regime set out in the Health (Amendment) Act 2013 was intended to decrease but not eliminate any gap in the cost of providing services to private in-patients. The additional income generated as a result of the enactment of this legislation is a key element of the funding to the public hospital system and any curtailment of this funding stream would put pressure on the taxpayer to maintain services.