Update: Increased Premiums of Private Health Insurance – Health 30th September, 2014

QUESTION NO:  81

 
  To ask the Minister for Health the degree to which he or his Department continues to monitor the costs of private health insurance throughout the health sector; if conclusions have been reached as to the cause of increased premiums having particular regard to the concept of community rating or departures therefrom; if the cost of private health insurance in the private and public sectors have been separately examined with a view to preventing cross subsidisation; if evaluation has been done or comparisons made between the public and private sectors in this regard; and if he will make a statement on the matter.

                                                                         Bernard J. Durkan T.D.

 
REPLY.
My Department and the Health Insurance Authority (HIA) monitor the factors that contribute to costs on an ongoing basis. The cost of private health insurance is influenced by issues such as the number of persons and the age profile of those holding private health insurance and new treatment interventions which can have an impact on the cost of care and the cost of claims.

I am determined to address the issues contributing to increased costs in the sector. Health insurers also have an important role to play in keeping health insurance affordable. I welcome the 2% reduction in claims costs across the market for 2013 reported by the HIA and urge the sector to further build on this positive achievement. As part of the Consultative Forum on Health Insurance, Mr. Pat McLoughlin was appointed as Independent Chair to work with insurance companies, my Department and the HIA to identify effective cost management strategies for the industry. Mr. McLoughlin’s final report is expected shortly and I will consider how the recommendations can best be implemented.  

I am also keen to create the best possible environment within which more people, particularly young people, will want to obtain and retain private health insurance. Under Lifetime Community Rating, from 1 May 2015 loadings will be incurred by anyone aged 35 or over taking out private health insurance for the first time. Loadings can be avoided by taking out health insurance before this date. I am also going to address the sharp price increase that younger people currently experience when they can no longer avail of student discounts. This has led to a substantial reduction in penetration rates in the 20-25 age group, which I will address by making legislative provision for the introduction of Young Adult rates in 2015.  

The Deputy refers to the cost of private health insurance in the private and public sectors in the context of cross-subsidisation. The Health (Amendment) Act, 2013, provided for the introduction of charges for all private inpatients, including those accommodated in public beds. As a result, private patients pay for receiving a private service that, up until now, has been heavily subsidised by the taxpayer.