Coalition health plan would have pushed up costs by €650m

The Government's original model of universal health insurance, proposed by former Minister for Health James Reilly, would have increased the cost of running the health service by €650 million annually, the Cabinet will be told today.

In a memo to the Government, Minister for Health Leo Varadkar is expected to say new research has found this expenditure would not have been outweighed by benefits in terms of improved patient outcomes, lower healthcare prices or premiums.

It is understood Mr Varadkar will urge the Government to undertake further research into the most appropriate system of universal health insurance and to not make a final decision until late in a second term, if it is re-elected.

Third term

Under the Minister’s new proposals a system of universal health insurance – which was to be have been the centrepiece of the Government’s healthcare reform programme – would not be put in place until a third term.

The Minister will bring to the Cabinet three studies of universal health insurance by the ESRI, KPMG and the Department of Health.

The Irish Times reported last June that the Minister had been advised by researchers that a standard package of benefits under the original model could cost more than €2,000.

A White Paper on universal health insurance drawn up by Dr Reilly in 2014 envisaged a system being put in place comprising a number of different insurance companies – a multi-payer model.

In his memo, Mr Varadkar is expected to say the new studies have estimated a universal health insurance package covering GP care, hospital care and mental healthcare could cost €2,228 for adults and €773 for children, prior to any Government subsidies.

Different subsidy levels

The memo says the research examined different levels of subsidies for various income groups. It says a system involving a full subsidy for medical-card holders, partial subsidies for those with GP visit cards, higher subsidies for those with incomes up to 175 per cent of medical card thresholds and no subsidy for the other 40-plus per cent of the population could cost the exchequer €3.7 billion.

However, it says this would result in an overall reduction in tax funding for healthcare of €1 billion.

The memo says researchers estimated a more generous subsidy scheme to ensure no one paid a premium of €1,200 would cost the exchequer €6.3 billion a year.

It says this would result in an overall increase in tax funding of healthcare of €1 billion.

Dr Reilly’s White Paper suggested universal health insurance would be introduced by 2019. As Minister for Health, Mr Varadkar significantly slowed the pace of this reform.