Rising health insurance costs to be tackled with measures

Minister for Health Leo Varadkar has announced a series of measures designed to tackle the problem of rising health insurance premiums.

The package includes a reduction in stamp duty, lower premiums for young adults, the previously announced introduction of Lifetime Community Rating and a reduction in the Health Insurance Authority Levy.

The Minister said his proposals build on Budget measures which included a freeze on hospital bed charges, and no decrease in the relievable amount for tax relief purposes.

Health insurers have not taken up Mr Varadkar’s proposal to freeze premiums, but he said today he hopes the package would help limit increases to single-digit figures.

“These measures are designed to work as a package and make private health insurance affordable again for as many people as possible,” Mr Varadkar said today. “We want to try and limit the need for increases in premiums, and even secure some reductions if possible.”

Nominal rate

The levy insurers pay to meet the running costs of the Health Insurance Authority is being cut to a nominal rate of 0.01 per cent of premium income for two years, from next year.

This will save the insurers €2 million a year. Thereafter, the levy will be set at 0.09 per cent, 25 per cent less than at present.

Lower premiums for young adults will kick in after their 21st birthday, when rates traditionally rise by 100 per cent or more. Details of the discounts will be in the Health Insurance (Amendment) Act, to be published tomorrow.

Stamp duty is being reduced by up to 20 per cent for products providing basic cover, which are a minority in the market. Stamp duty on advanced products is being frozen for the first time in a number of years; last year, it was increased by €49.

The time was right for a new approach, the Minister said, given the improvement in the economy and the increase in the number at work. For the first time in many years, the number of people with private health insurance increased in the quarter from July to September.

While the increase was modest, at 1,000, Mr Varadkar said he hoped the new measures would allow the trend to continue.