Minister Reilly rejects claims of forcing hike in Health Insurance Rates

Health Minister James Reilly TD rejected a media claim today (31 July) that he had forced a hike in the cost of private health insurance by the way in which levies were set for Community Rating. He made the following points:

1. The levies are designed with the sole purpose of supporting Community Rating – in other words, ensuring that health insurance is affordable to older persons as well as the young. The levies are not intended to support one insurer over another. The Government does not remove money from the market with the levies. It distributes money around the insurance market, by subsidising the cost of older people’s premiums. They should not lead to price increases – they are designed to spread the total cost between younger and older customers so as to make health insurance more affordable for those who most need it.

2. The VHI had no influence whatever over the Minister’s decision. The Health Insurance Authority made recommendations on the rates that should be applied, and no insurer had access to that recommendation before the Minster made his decisions.

3. On the advice of his officials, the Minister decided that there was too large a gap between the rates proposed by the HIA for ‘advanced’ and ‘non-advanced’ products. There was a concern to ensure that the market remained stable, and that there would be an appropriate mix in the take-up of advanced and non-advanced products.

4. Acting on the advice of his officials, the Minister decided to set rates with a lower gap. This is entirely in keeping with his statutory function under Risk Equalisation legislation.

5. The Minister remains committed to tackling costs in the private health insurance industry and all of his decisions are taken with this concern at the top of his agenda.