Denis Naughten TD has published proposals to urgently address the spiralling costs of health insurance which are now forcing many families out of the system.
“Without immediate action from the Minister for Health the haemorrhage of 300,000 people out of the system will rapidly increase putting further upward pressure on insurance premiums,” stated Denis Naughten.
“These trends clearly indicate that only those who rely on health insurance due to chronic illness and the wealthy will remain within the system in the coming years unless immediate action is taken to curb the haemorrhage of the young.”
According to Deputy Naughten this situation is unsustainable, especially for families struggling to meet the existing health insurance premia.“As the health insurance system in this country currently operates, it cannot survive without young people joining up. However, there is little chance of this happening if they have to pay the majority of their premium towards the cost of insuring others,” he outlined.
As part of the Minister for Health’s plan to further increase the health insurance levy Denis Naughten is proposing four immediate steps which could help to reduce pressure on the rising cost of health insurance.
These are:
1. Introduce a lifetime community rating measure on health insurance policies which will help to reduce the cost facing many families at present. This proposal would see the Health Minister act upon legislation introduced in 2001 to facilitate lifetime community rating whereby if someone takes out health insurance later in life they pay more. Effectively, a 60-year-old person who took out health insurance at 25 pays the same as a 25-year-old but a 60-year-old who took out health insurance at 55 would pay more to allow for the fact that he or she did not make the contributions when they were younger.
2. Introduce health status as a mechanism to distribute the health insurance levy. Presently under health insurance law, there is provision to apportion the risk equalisation on the basis of “health status” in order to ensure that insurers who have a relatively sicker profile of risks can be compensated for that profile.
However, this is determined by the number of bed-nights claimed by the insured. An effective and efficient model needs to be developed which takes into account the actual illness profile of the customer base, not merely how long they occupy a bed. This would reduce health and private health insurance costs.
3. Encourage policy holders to shop around. While the HIA has an award-winning health insurance price comparison website, the fact remains that many older people are not as technology savvy. The Authority has a cash reserve of ■8m and at least some of this should be used to travel directly to communities throughout the country and, working with organisations like Age Action, provide face-to-face assistance to older people to maximise their level of cover while reducing the cost of premiums. This reduction in premium would have a knock-on benefit to the market as a whole, spreading risk across more providers thereby reducing pressure on the upward spiral of the health insurance levy.
4. Give insurers the ability to negotiate directly with hospitals. Presently, insurers do not have the ability to negotiate with public hospitals. This policy will change with the introduction of Universal Health Insurance (UHI). While it would not be possible to allow for a blanket mechanism to negotiate pending the roll out of UHI, it should be possible to introduce a limited process which would allow hospital groups to offer services, at a competitive rate, where spare capacity exists within their individual hospital network
“It is estimated that 80,000 people left the health insurance system last year, mainly young families struggling to meet bills, due to the rapidly rising cost while at the same time people over the age of 60 were signing up for health insurance. Therefore unless immediate action is taken the price of health insurance will be pushed beyond the reach of many families, forcing even more people back on a struggling public health system,” concluded Denis Naughten.