Private Members Business – Health Insurance


Thank you for the opportunity to speak on this Motion.


For the past two years, this Government has consistently striven to ensure that the cost of private health insurance for ordinary families in Ireland is kept down and I believe that our efforts in this regard will continue in the months and years to come.


It is a complex question, involving competition in the marketplace, the base cost of procedures and the pay of the professionals involved.  Undoubtedly there have been significant price rises in recent years, and this, coupled with declining household incomes in many cases, has seen many families forced to opt out of private health insurance, placing an even greater burden on the public system.However, over 45% of the population are currently covered by health insurance, greatly alleviating the burden on the public health system.


In terms of the drive to reduce costs, there have been some notable successes. For example, VHI has instituted cost savings of over €300 million, through reducing consultants’ fees and payment for procedures such as inserting stents and MRI scans.  This cost saving drive has also resulted in a large increase in the number of day case procedures and average length of stay has also been decreasing.


Competition is a key factor in today’s private health insurance market and while there are four main players in the market, GloHealth only has one percent of the market, Aviva 16.9 percent and Laya 21.5%, meaning that the market is dominated by VHI, which has over 56% of the market. Yet, there are pitfalls to having such a large segment of the market as many older people have never switched providers and thus while VHI has 56% of the customers, it has 67% of the claims. By offering inducements to adults with small children, companies are targeting young professionals in their 30s and 40s, ensuring that their products are most attractive to people whose need is least in terms of health procedures.


One aspect of the payment structure that has received much focus is community rating, but I believe that this intergenerational solidarity is necessary if we are to prevent our health service, both public and private, from crumbling. There is little incentive to pay large health insurance premia during the years that one is least likely to have to avail of it, only to be pushed out of the private system as one ages.  Without community rating, very few older people would be able to avail of private health insurance and the huge pressure on departments such as orthopaedic and urology departments all across the country, would soar.


The Health Insurance Authority has in recent years been highlighting the ease with which people can switch providers and has matched their ambitions with actions in terms of a very user friendly plan comparison tool, where individuals and families can assess what plans best suit their needs and what savings can be made and it is something which I would encourage everyone to visit before renewing their health insurance. It can be accessed at

Finally, I believe that the Risk Equalisation measure currently in place in Ireland has forced private health insurers to seek greater efficiencies rather than cherry picking the best and healthiest customers, creating the leanest regime possible in terms of administration.