Tuesday 15 November 2012
“The Bill is part of a compendium of initiatives for reform. We should all join the Minister and the Government in their efforts to have a single tier health system and a universal health insurance system. It will take some time to implement these reforms. It takes longer than 18 months to become a concert pianist or an inter-county hurler. Therefore, this reform may take some time to achieve, but it will happen. Commentators on health issues should move away from commenting on personalities and instead examine the substantive work involved. The programme for the reform of the health service is essential and will be delivered. As Deputy Damien English and the Minister said, it will take at least one or two terms to achieve. Deputy Twomey referred to the dark clouds in the private health insurance sector which people in droves. They are voting with the money in their pockets, which is having an impact on the delivery of public health services. I appeal to the private health insurers not to look on the private health insurance market solely in profit terms but to make an effort to persuade younger people to sign up to take out private health insurance, the cost of which has escalated. As the Minister said yesterday, the challenge is to make the market viable and relevant.
I suggest the Minister and his Ministers of State should use the consultative forum as the vehicle to drive and advocate change to ensure the ultimate goal of having a universal health insurance system is attained. I refer to the American presidential election which was dominated by the issue of Obama health care. A universal health insurance system must provide a health care model that is fair, equitable and accessible to all citizens. That is what we must aim to achieve. The three principles are community rating, open enrolment and lifetime cover. They form the basis of regulation of the health insurance market and ensure a person’s age or state of health is not a determinant factor in the level of premium charged. The insurer cannot calculate for risk status, age or gender when deciding on a person’s insurance premium.
I am not clear on section 3 of the Bill which amends section 2 of the principal Act of 1994. Is discrimination on the basis of sexual orientation allowed? I ask the Minister of State to clarify the matter for me. Irrespective of age, risk status or previous history, all consumers and customers of private health insurance companies must have the right to review their policies. The time has come when we need to take control of the management of operations in the health insurance sector in order that we can reform it for the betterment of the consumer – the patient. In the absence of regulation, there will be cherry-picking of customers. Young people will be targeted because they are a profitable segment of the market as they are low risk. Older customers will be charged higher rates because they suffer more health problems. We must regulate and review the operations of health insurers.
The opening up of the health insurance market has caused its segmentation. Insurers now offer cheaper and tailored packages to young people which have been designed to be unattractive to older people. However, more young people are falling off the private health insurance ladder. Despite the safeguards, there are concerns about the operation of the market. VHI has stated the levy and age-related tax relief system is only 55% effective.
I accept that addressing these issues requires a delicate and difficult balancing act but we must maintain competition and avoid exploitation of the markets for excessive profit. We must ensure insurance is available at a fair and reasonable price. I say this as a long-time customer of VHI. It is essential to have fair and reasonable prices. Constituents in all our clinics are talking about this.
The decline in the number of people with health insurance cover since 2008 is in the order of 170,000. In the three months to August 2012, 16,000 people cancelled or did not renew their health insurance policies. This is an extraordinary number. The HIA figures show some very interesting characteristics in the market. VHI remains the dominant player, with a 57% market share. Laya Healthcare has a market share of 20.9% and Aviva Health Insurance Ireland has a share of 17.7%.
Distortion based on age is very noticeable. Laya Healthcare and Aviva Health Insurance Ireland combined currently insure 44% of customers between zero and 49 years but only 10% of those over 80 years. This is in contrast with the figure for VHI, which insures 83% of those over the age of 70 years who are insured with an open insurer, increasing to 90% of those over 80 years.
For a small country, we have a number of insurers but a large number of policy options. There are approximately 200 price plans available. At the last committee meeting on this topic, Deputies who asked about this, particularly Deputy Mary Mitchell O’Connor, were told to shop around. My problem is that, when shopping around, people do not necessarily understand the small print. It behoves the HIA and the insurers to make it clear to customers what they are actually signing up for.
Instead of announcing across-the-board price increases, insurance companies have been announcing smaller price increases regarding particular plans. The HIA website shows that, over the past two months, there have been ten announcements of price increases by insurance companies. These increases in the prices of individual policies have been compounded by the general price increases across the board. In the past 18 months, each of the major insurers has announced at least three across-the-board price increases, and we are told there may be more in the new year. I will not refer to companies individually; suffice it to say that every one of them has announced price increases. This is a source of worry for everybody.
The prices make it difficult for families to continue to be insured. They must make a choice, in some cases to opt out of paying for health insurance. Opting out has an impact on the public health system. It is incumbent on us to make it easier for people to retain health insurance cover. It is easy to understand why people are struggling to make payments. At a time of inordinate and unacceptable salaries and pensions for bankers, what is happening is morally wrong. We are forcing people to make a choice between paying for health insurance cover and opting out. If the Government does nothing else, it should recognise that people deserve to be able to choose health insurance at a reasonable and fair price. This is why, at the committee meeting some weeks ago, we had a very strong debate with the HIA and health insurance companies on the market and pricing. In the new year, we will move towards universal health insurance.
At the meeting with the health insurers, they said they wanted to be able to offer cheaper premiums to those with healthier lifestyles, while also rewarding people for taking out health insurance at an earlier stage in their lives. In saying this, they were referring to lifetime equalisation. The companies claim such moves could stop large numbers of young people leaving private health care or entice them to return. I hope we can achieve this as part of our move, in the medium to short-term, to attract more young people back.
At the meeting, the HIA encouraged customers to shop around. It stated openly that there were significant differences in prices and better value for many if they shopped around. In this regard, I refer to Mary Harney’s adage, “We must shop around.” This is fine but if people are to have the potential to save thousands of euro, they must be able to understand what is being offered and how to avail of offers. Sometimes what is said on the tin is not what is offered.
Even with the underlying principles of community rating, open enrolment and lifetime cover, it remains very profitable for individual insurance companies to attract younger, healthier consumers and avoid older and less-healthy people. We must consider this.
The Bill proposes to implement a permanent risk equalisation scheme to replace the current interim scheme. The current system works to ensure the young and old pay the same sum for insurance, and it works using a combination of a levy and tax credits. I very much welcome that the aim of the Bill is to ensure that access to health insurance will be available without differentiation reflecting the cost of health services based on risk, age, gender or utilisation.
It is hoped the Bill will reduce market segmentation by making it more difficult for companies to implement new policies and to change prices. When implemented, an insurer will have to give the HIA 90 days’ notice of new contracts. Insurers will also have to give notice of changes to existing policies. Where price changes are concerned, the notification required will increase from 31 to 90 days, an increase of 200%. I hope this will go some way towards preventing the practice of imposing small price increases on individual policies.
I thank the Minister of state, Deputy Alex White, for his indulgence.
There are many challenges facing the health insurance market and the consumer. As the price increases, more consumers relinquish their policies and, in turn, the cost to the insurer increases. Thus, the spiral of price increases continues, with a profound impact on the public health system. For private health insurance to meet its social objectives, we must make it attractive for people to retain it or to purchase it for the first time. We must not allow a continuation of the circumstances in which customers are forced out of the market because of the price.
I hope the Bill and subsequent amendments tabled by the Minister on cost subsidisation and the discouragement of market segmentation will help to achieve the desired outcome of having a sustainable market characterised by fair and open competition. Is it not extraordinary that, although we are dealing with one of the most important Bills on the health market, the Opposition is absent yet again, thereby demonstrating its commitment to universal health insurance?”