Martin Publishes Health Insurance Bill

30th June 2000 - Announcement
The Minister for Health and Children, Mr. Michael Martin, T.D., today (30 June 2000) published the Health Insurance (Amendment) Bill, 2000.

Background
Together with the Health Insurance Act, 1994, this piece of legislation will provide, in the interests of the common good, for the regulation of the business of private health insurance in this country.

The legislation is being introduced pursuant to the Government's White Paper on Private Health Insurance, which included among its proposals the amendment of key provisions of the 1994 Act. Having regard to the EU's Third Non-Life Insurance Directive, and EU obligations generally, the arrangements leading up to the publication of the White Paper included close and positive co-operation with the Commission's services on the proposed reform of the health insurance legislation.

Thrust of the Bill
The Bill has been prepared to amend and extend the Health Insurance Act, 1994.

Minister Martin said that "the Bill is aimed at enhancing scope for competition in private health insurance business, whilst maintaining the necessary safeguards for the core principles of community rating, open enrolment and lifetime cover which have characterised our system of health insurance."

Key Features of the Bill

• A change in the key definition of a 'health insurance contract'. In particular, removal from the scope of the legislation schemes of insurance which are solely concerned with 'ancillary health services' (e.g. out-patient services, general practitioner services, dental services, etc.) is intended to facilitate innovation and greater focus by insurers in this area where a significant market has not developed to-date.
• The proposed Health Insurance Authority to be given a specific role in relation to the commencement of risk equalisation between insurers. The Minister will set out in regulations significant levels of discretion within which it will be a matter for the Authority to recommend to the Minister whether or not material differences in the risk profiles of competing insurers warrant the initiation of risk equalisation transfers.
• New insurers to have an option not to participate in risk equalisation arrangements for a period of three years immediately following the commencement of health insurance business here. This will provide a significant window period to enable insurers to recover costs associated with setting up business and establishing a customer base.
• Introduction of 'lifetime community rating' through allowing insurers discretion to apply late entry premium loadings in specified circumstances; primarily to persons of or over the age of 35 who aretaking outprivate health insurance for the first time, or after a significant lapse in cover. Such loadings will not apply to persons currently insured in respect of their existing level of cover.
• The entitlement to purchase health insurance cover, under open enrolment provisions, to be extended to persons of, or over, the age of 65 years who could previously be refused cover (if they were entering private health insurance for the first time or their previous cover had lapsed for a material period).
• Scope of discretion by insurers to reduce premiums for dependent persons, who are receiving full time education, to be increased from under age 21 to under age 23.

Risk Equalisation
The Minister said that " it remains Government policy, as stated in the White Paper, to introduce risk equalisation to support the maintenance of community rating". He noted in regard to the facilitation of competition, that the proposed new arrangements for commencement of risk equalisation would involve the significant input of an independent statutory Authority, as well as a reduction in any potential liability on the part of an insurer which achieved a risk profile materially more favourable than its competitors.

Health Insurance Authority
Arising from consultations held with representative and professional bodies, the Minister is proceeding with arrangements to establish the Authority and will announce its membership at the earliest possible date.

Concluding Comment
The Minister said that "Governments, international organisations and authorities on the subject recognise the difficulties which exist in achieving effective healthcare financing reform, particularly as regards striking the right balance between solidarity measures and competition considerations. He said he was confident that "the provisions of the Bill would enable the desired balance to be achieved in the best interests of the consumer."