Penalise over-30s for first time health cover, says report

Minister for Health should move to get younger people into market, audit suggests

A report on the health insurance market says financial penalties for newcomer over-30s   would be in line with the idea of “lifetime community rating” which Minister for Health Dr James Reilly (above) has previously indicated he will introduce.  Photograph: Cyril Byrne/The Irish Times

A report on the health insurance market says financial penalties for newcomer over-30s would be in line with the idea of “lifetime community rating” which Minister for Health Dr James Reilly (above) has previously indicated he will introduce. Photograph: Cyril Byrne/The Irish Times

Thu, Dec 26, 2013, 18:13

Anyone over the age of 30 should pay a financial penalty when they take out health insurance for the first time to encourage them to get cover at a younger age, a Department of Health report has recommended.

The report says the move would be in line with the idea of “lifetime community rating” which Minister for Health Dr James Reilly has previously indicated he will introduce.

The report, commissioned by Dr Reilly, says he should consider measures to get younger people into the health insurance market.

It also says the Minister should “discourage, by means of a financial penalty, people who take out health insurance for the first time after age 30”.

“This would be in line with the principles of lifetime community ratings,” the report added.

The move would be designed to stop the flow of younger people out of the health insurance market.

The Irish private health insurance market is based on the principles of community rating, where everyone pays the same for identical products regardless of age.

Younger people - who tend to claim less frequently - are charged more than would normally be actuarially necessary.

This money is then used to subsidise the cost of cover for older people for whom the price of insurance could be prohibitively expensive if based on risk.

As more younger people leave the market because of higher prices, questions have been raised about how the cycle of inter-generational solidarity can be maintained in the future.