Leo looks for health cover price freeze
Health Minister Leo Varadkar is to ask insurance companies to freeze the price of their health policies in return for a commitment from the Government not to increase taxes on the industry.
The proposal, which will operate over the next two years, is a move to reverse the trend of people ditching health insurance since the recession and encourage more people to return to health insurance or take out policies for the first time.
The idea will be discussed at Cabinet level in the coming weeks. Mr Varadkar will also propose a sliding scale of discounts on insurance policies for people aged between 21 and 25 to encourage them to take up health insurance.
More than 280,000 people have opted out of health insurance since figures peaked in 2008.
The rising cost of premiums was largely to blame.
Almost a third of those who left were in the 18-29 age group which was putting money into the industry, but because of their age and associated health, was not generally claiming.
Their departure from the health insurance sector therefore meant an increased financial pressure on it.
Stamp duty is paid by insurance companies to cover the risk equalisation scheme which ensures people pay the same for the same policies.
This takes pressure off older and sicker policy holders who might otherwise be charged higher premiums.
The current stamp duty rates are €100 and €290 for children and adults respectively for basic policies and €135 and €399 for premium policies.
Former Health Minister Dr James Reilly increased the duty last November for premium polices, up from €120 for children and €350 for adults.
Insurance companies then passed on the costs to policyholders when the new rates came into effect last March.
While Minister Varadkar says the Government can't interfere in the market, it is hoped the insurance companies would respond in a positive way to proposals not to increase some taxes such as stamp duty which has to be decided shortly.
Discounts might also be applied for younger people to encourage them to take health insurance.
These discounts could apply over a four year period from about the age of 21 so that students could establish themselves in the workplace before moving from a student rate to a full adult rate for health insurance, according to The Irish Times.
At present, single-rate community rating applies, which means the age of a person entering the health insurance system does not determine the level of premium to be paid.
But under a proposed new system, those who take out insurance later in life will end up facing a loading on their premium.