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Older people could face higher health insurance rates (Sunday Business Post)

04 November 2011

Older people may have to pay higher health insurance premiums if the government proceeds with a plan to introduce risk-rated health insurance in the budget on Tuesday.
The government is believed to be considering dulling the blow of higher insurance premiums for older people by offering them tax relief at the higher rate in the budget.
The other option under consideration by the government is a levy on all health insurance, the proceeds of which would be used to keep down the price of health insurance for older people.
If the government does not introduce changes in the budget, it is feared that the VHI could move to market health insurance plans that would not be attractive to older people, effectively making it difficult for older people to buy health insurance.
The state-owned VHI has been in commercial limbo following a ruling by the Supreme Court earlier this year against the current risk equalisation scheme. The scheme provided that health insurance companies with lower risk customers would compensate the VHI for the added cost of providing health insurance to older customers.
It is believed the average VHI payout is about €616 per customer per year, almost double the payouts made by newer health insurance players in the market such as Hibernian Health (previously Vivas Health) and Quinn Healthcare (previously Bupa).A spokeswoman for the VHI said the company would welcome any measure the government took to minimise the impact of the Supreme Court decision.
Asked to comment on whether the government was considering risk-rated health insurance or a health insurance levy, a spokeswoman at the Department of Health issued a statement, saying that ‘‘a number of options are being examined in consultation with officials, the Attorney General and the Health Insurance Authority.
‘‘There are complex financial, legal and policy matters involved,” she said.’ ‘The government’s objective in health insurance has been that it should be affordable for older and sicker people. Intergenerational solidarity in health insurance has always received widespread public and political support.
‘‘Although the Supreme Court found the risk equalisation scheme to be ultra vires, it did not strike down the principle of risk equalisation or any of the other important elements of the regulatory framework that supports private health insurance in Ireland.”