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Leo in bid to make health insurance cheaper for young

HEALTH Minister Leo Varadkar is implementing health insurance reforms in the hopes of encouraging an upswing in the numbers who are covered.

And the minister hopes that younger people in particular will come back to the private insurance market, as they have flocked away in recent years due to soaring premiums.

At present, all private health insurance companies pay stamp duty to a central fund, based on the age profile of individual customers that they insure.

Mr Varadkar has announced a reduction in that duty for "non-advanced" health insurance policies.

The €100 duty paid by the insurer for each customer aged up to 17 on its books, will be reduced to €80, while the rate paid for those aged 18 and over will be reduced from €290 to €240.

However, there is no guarantee, as yet, that the insurer would pass this on to the customer.

There was also no reduction in the equivalent €135 and €399 duties paid to the fund by insurers, for customers with "advanced policies" on the books.

That fund is used to pay health insurance companies "credits" based on both risk equalisation and the actual use of hospital beds by customers.

The risk credit received by insurers, introduced to ensure fairer premiums for older customers, is based on the age and gender of customers.

The minister has reduced these credits, almost across the board.

Credits

For example, an insurance company providing basic cover to a male customer aged between 60 and 64, will receive €200 rather than €250.

But the hospital bed usage credit has increased by a flat 50pc - to €90 paid to an insurance company for each night a customer uses a hospital bed.

Mr Varadkar said the measures were designed to work as a package and make private health insurance affordable again for as many people as possible.

"We want to try and limit the need for increases in premiums, and even secure some reductions if possible," he said.

"I think the time is right to try a new approach. The economy is growing again and more people are back at work," he added.

There was a modest increase of 1,000 in the number insured between July and September.

The majority of the changes are due to be implemented in March 2015.

hnews@herald.ie


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