The VHI and other health insurers are to be allowed to charge higher premiums to people who are over 35 when they first take out insurance. The provision is contained in a Bill published yesterday by the Minister for Health and Children, which also provides for the establishment of a Health Insurance Authority.
The Bill modifies the principle of community rating which has applied up to now and which allows people to pay the same premiums for health insurance regardless of age.
What is proposed is a system in which people who put off taking out health insurance until after they reach 35 (and are therefore more likely to need health services) will pay more than those who take out insurance at an earlier age.
The maximum loading on first-time insurers over 35 will be laid down by regulation. Those who take out insurance before they reach 35 will not be subject to any age-related loading for basic health cover.
The Bill also proposes that health insurers will be allowed to charge everybody on an age-related basis for cover for out-patient services, GP services and dental services, where a significant insurance market has not developed to date.
This removes the legislative obstacles to the VHI's plans for a scheme to cover a number of visits to a GP every year, for which older people will be charged more than younger people. The VHI is currently in difficult negotiations with the Irish Medical Organisation on proposals for this scheme.
Insurers will also be allowed to market cheaper insurance to students under 23.
The effect of the changes will be that the main health insurance plans covering hospital accommodation and treatment will cost the same regardless of age, provided the insured person joins before the age of 35. The VHI welcomed this move yesterday, saying it would encourage young people to take up health insurance.
However, optional, "add-on" schemes, such as cover for GP or dental services, can be charged for on an age-related basis.
The Health Insurance Authority will also be able to decide from time to time whether health insurers with a disproportionate number of older members are entitled to be compensated by rivals with a disproportionate number of younger members. BUPA was reserving comment on the Bill yesterday, but has previously objected to such compensation.