DAIL DEBATES


Health Insurance (Amendment) Bill 2000 Second Stage Resumed

Sitting Time
Sitting Date
18:30
14 December 2000
Text:

Mr. Kelleher: I welcome the opportunity to discuss this Bill which will amend and extend the Health Insurance Act, 1994. Private health insurance plays an important role in the provision of hospital services to a large proportion of the population. The Minister for Health and Children, Deputy Martin, intends that this Bill will provide a framework which further supports the development of a vigorous and competitive private health insurance market.
The Bill implements improvements and innovations in the general
regulatory framework outlined in the White Paper on private health
insurance published by the Government in September 1999. The Bill also aims to provide an enhanced scope for competition in the market, while strengthening the basis on which solidarity between generations operates through community rating.
The essence of and challenge to legislation in this area is to strike a successful balance between good common values which have served our significant insured population well, and the encouragement of competition which will benefit consumers in terms of choice, price and service. The achievement of this balance is at the heart of this legislation.
The voluntary private health insurance system has developed to its current high penetration levels on the basis of specific and widely-accepted core principles of community rating, open enrolment and lifetime cover which provide extensive safeguards. The health insurance market was opened to competition under the Health Insurance Act, 1994, enacted in the interests of the common good. The Act provides significant safeguards for insured persons in the context of opening the health insurance market to competition in accordance with EU obligations.
The 1994 Act requires health insurance undertakings to operate in accordance with community rating, open enrolment and lifetime cover. It also provides for minimum benefits whereby undertakings cannot provide less than a specified level of cover. In addition, it provides for risk equalisation, the sharing of community risks and the registration of undertakings.
The Act also provides for the establishment of an independent regulatory body known as the Health Insurance Authority. During the passage of the 1994 Act, it was indicated that, because regulation in this area represented a completely new departure, the framework would be reviewed in five years. The programme for Government laid the ground for the preparation of the first policy statement on private health insurance delivered in the White Paper.
The White Paper outlines how the health insurance system complements arrangements for the provision of health services to the public. In that context, it refers to the advantages resulting from the mix of public-private practices in hospitals. Notwithstanding this, and as stated in the White Paper, the primary concern is to ensure equal access to public health services. Since taking office the Government has pursued this responsibility through an extensive programme of current and capital expenditure. The Estimates highlighted the Government's commitment to ensure we have a proper public health service.
For many years people were concerned we were drifting towards a two-tier health system. We have a long way to go to ensure those in the public health system receive equitable treatment to those on private insurance.
There are long waiting lists for those in the public health system but this is not the case for those with private insurance. We are trying to address this issue and will continue to do so.
The Government acknowledges the difficulties in health and is allocating huge resources to this area. It is timely that we have set up a value for money audit system for which many people called over many years. This Government has increased the resources going into the service on a day-to-day basis by almost 60%, yet we still have long waiting lists.
However, we should not despair because, if we continue to allocate the resources and address the blockages in the system, I am confident the Minister and the Government will overcome difficulties regarding waiting lists and other procedures.
Section to follow:
Section UU follows.

Sitting Time
Sitting Date
18:40
14 December 2000
Text:
Mr. Kelleher continuing
During the past 25 years major strides have been made in the technology available to surgeons in our hospitals. Those technological advances create and perpetuate new waiting lists as new procedures are carried out. Many people who heretofore would not have been able to avail of such treatment can now avail of it in the public health sector, and such advances create waiting lists. We must continue to ensure that those in receipt of the public health service have access to a fair and equitable service. It would be disingenuous if we allowed a drift towards a two tier health service, as has happened in other countries, particularly the United States, which did not address the problems presented in time.
As the demographics here change over the next number of years, greater pressure will come to bear on the public health system, as the present young population moves into the higher risk category. We must put in place the necessary strategic measures to ensure we get ahead in terms of the waiting lists and that as the population grows older we have a proper procedure in place to ensure that they can avail of health services.
I have raised the matter in other fora of people taking out health
insurance. From speaking to my peers and younger people, I am aware that they are not very conscious of the need to take out health insurance cover until such time as they take out a mortgage or move into the workplace. Eighteen year olds or 19 year olds are vibrant and healthy and are not as conscious as older people of the need to take out health cover. We must address that issue by way of advertising or tax incentives. I feel strongly, not only about the need to take out health insurance, but also life policies to ensure that in times of need people cam claim under them. We have failed to encourage young people to take out such insurance in the past. The Minister might address that issue in the broader context of insurance.
The Government has made an extra £150 million available to the health services since taking up office, which represents an increase of almost 60% in the day to day resources being invested in the services. This level of increased investment will be sustained. The Government has also recognised that the current health infrastructure is inadequate for the delivery of a truly modern and effective service. The total of £2 billion made available by the Government under the National Development Plan 2000-2006 represents almost a trebling of the investment compared with the previous seven year period.
The serious approach adopted by the Government to health capital funding is highlighted by the fact that this is the first time a national development plan has included health services to any significant extent. The national development plan will bring positive benefits to all sections of our health services and will enable substantial improvements in the physical infrastructure, equipping of acute hospitals and in facilities for the intellectually and physically disabled, older persons, the mentally ill and children in need of care and protection. The thrust of the national development plan is to create an infrastructure that will
bring about significant and tangible advances in delivering a more
patient-centred accessible service.
Public patients who take up 80% of our public hospital bed capacity will benefit significantly from the investment in this hospital sector. That is an indication of the Government's planning, in particular in the national development plan, which takes account of the demographics and the need to put in place large-scale infrastructural development in the health service. We all remember in the 1980s when it was necessary to reduce public spending and substantial cuts were made in the health services from which we are now recovering. We have the necessary financial resources available to put in place the required health infrastructural development,
which is very timely.
This Bill is welcome. A health insurance company that has come into this market is concerned about the issue of risk equalisation. Section 10 inserts an exemption from risk equalisation in the case of new insurers entering the market. The period of such an exemption will be three years from the date the insurer concerned commences carrying on a health insurance business. A new insurer will, however, be required to make statutory risk equalisation returns in respect of the conduct of its business for all but the first six months of the exemption period. These returns will not be reckoned by the health insurance authority for the purpose of risk equalisation. While that is welcome, have we gone far
enough? If the purpose of the Bill is to encourage and ensure there is more competition in the marketplace to drive down the cost of health insurance cover, we must consider if health insurance companies who wish to enter the market, which has become competitive since the entry of BUPA, will be discouraged by the existence of a risk equalisation scheme, irrespective of the three year exemption class for new entrants to the market.
We will have to consider that area, given that new entrants to the
market will face high start-up costs, they will have to invest heavily in advertising to break the loyalty to the existing insurance companies and they will have to cope with the economies of scales. We will have to reconsider this matter to ensure that we do not discourage new entrants to the market to ensure there is vibrant competition in the health insurance sector, which it is hoped this Bill will help to bring about. If the Minister was satisfied with this aspect, I assume he and his officials have examined it and taken all the factors into account.
Section 10 goes a long way towards addressing the concern in this area. BUPA has raised a concern regarding risk equalisation. We could not accept insurance companies cherry-picking low risk categories, as is the case in the motor insurance industry. It would be dangerous to go down that road in terms of health insurance. I am satisfied the Bill ensures that every health insurance company entering the market will have to take on all people interested in taking out health insurance, regardless of their risk category.
I welcome the provision in section 5. It provides that in addition to providing to maintain the existing protections for consumers in relation to the setting of premiums on a community-rated basis, it prohibits the varying, on the grounds of age, sex or sexual orientation, of amounts payable by insurers in respect of the treatment and care of insured persons. It is important that we write into legislation and express in this House the need to ensure that everybody should be treated equally in terms of health insurance cover, unlike what happens in the motor insurance industry where companies can cherry-pick applicants. They target the low risk categories, which has imposed a major burden on the high risk categories, particularly young male motorists.
With regard to broader health policies, the Minister has been vocal and forceful in trying to ensure a reduction in the number of young people who smoke. While we introduce Bills such as this and spend vast resources on health infrastructure and equipping acute hospitals, we must urgently address the habit of smoking. People began smoking cigarettes simply because they were unaware at the time of the health implications, but research in recent years highlights, in great detail, the risk involved in smoking, particularly when one begins to smoke at a very young age. We must be vigorous in mounting a campaign to discourage young people taking up that habit. The difficulty is that when one is young and energetic and hanging around with one's peers, tobacco-related health problems do not come into the reckoning. We must target young people in primary and secondary schools by introducing a proper campaign on no smoking. We might consider asking sports people and well known personalities to
participate in an education video to highlight the dangers of smoking.
It is sad to observe that the first thing many young people do on leaving the school premises is to light a cigarette.
Section to follow:
Section VV follows.

Take Number: VV
Next Take Number: WW
Forum
DÁIL ÉIREANN

Sitting Time
Sitting Date
18:50
14 December 2000
Text:
(Mr. Kelleher continuing)
I know more than anyone how difficult it is to give up cigarettes but we must continue to pursue this as a high priority. In recent years we have had a vigorous anti-drink driving campaign which was successful because resources were targeted and advertisements shown. Society has accepted that it is not acceptable to drink and drive and we should now impress the dangers of smoking on the public mind. That has not worked so far and there is no point in kidding ourselves. When people reach 30 or 40 the effects of smoking cigarettes catch up with them because they are short of
breath but young people are taking up smoking in droves, particularly
young girls. They are under pressure from other areas such as models and advertising agencies. The subtle impression is given that if girls smoke they do not put on weight and they can look like wafer-thin models such as Claudia Schiffer and Naomi Campbell. That puts huge pressure on young girls and we should be conscious of that.
As I said, sports stars in educational videos might have an impact on young males, as boys are involved in more physical sports and might be conscious that if one smokes one's ability to reach the highest level in sport is reduced. We must be continually vigilant on this as we have a young population. If the percentage of people taking up smoking is maintained there will be a huge burden on the State in 30 or 40 years providing health care for those suffering serious illness because of smoking such as lungs, oesophagus and throat cancer as well as heart disease. For those reasons this should be a high priority.
The Bill is welcome and has broad support. I am concerned that if we put too many restrictions on health insurance companies we may not be able to get them into the country in the first place. We have a small population and the economies of scale may not be attractive to outside companies. The Government has acknowledged the need for huge resources to be put into health and the value for money audit is something to be welcomed. When we compare hospitals and health board areas we must find where the blockages are. Why are waiting lists not reducing given that £500 million has been invested in the health system? Why is there not a tangible and immediate reduction in waiting lists? Should we be more forceful? Are consultants in hospitals pulling their weight regarding the delivery of a health service to those in the public health system? Should
we address that?
If people are underperforming there should be a mechanism to address that. The public would be very supportive of a system whereby we get tough with people in the health service from the administrative to the medical side. If they are underperforming and do not reach an acceptable standard, there should be a mechanism to sideline them and to ensure that the health service we want for the people is available to them. I hope the Bill is successful in what it is trying to ensure. Only time will tell.