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Health Insurance

TDs to vote on 'cost subsidy' for health insurance

A new Health Insurance Bill will offer tax rebates to older health insurance, hoping to balance the cost of insuring young and old.

TDS WILL VOTE this week on whether to introduce a cost subsidy on health insurance, in a bid to end long-running difficulties around the higher costs of insuring older people.

The Health Insurance (Miscellaneous Provisions) Bill 2011 – which amends older insurance and tax laws from the 1990s – will be discussed in the Dáil on Wednesday and Thursday.

The B ill is aimed at ensuring that “the burden of the costs of health services be shared by insured persons by continuing to provide for a cost subsidy between the young and the old”.

From 2012, the Bill will provide for an age-related tax credit, where people aged 50 and over will be able to claim tax relief for the cost of their private health insurance.

Older customers are usually charged higher premiums than younger ones due to the increased chance of developing health complications in older age.

The Bill will also extend the Interim Scheme of Age-Related Tax Credits and Community Rating Levy, which has been in operation since 2009, for a further year in 2012.

The proposals, being brought forward by Health minister James Reilly, hope to bring an end to the controversy that followed the Supreme Court’s 2008 ruling on the government’s ‘risk equalisation’ programme.

In that ruling, the Supreme Court upheld a complaint by BUPA Ireland – now Quinn Healthcare – and ruled that private insurers did not have to compensate the VHI for its older customer base, dating from the time when it was the only health insurance provider in the country.

The Department of Health later complained, however, that insurers were designing their policies in ways that undermined “intergenerational solidarity” – and introduced new laws in 2009 encouraging insurers not to create policies specifically geared at older customers, or those of poor health.

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