FG and FF TDs block plan to abolish health cover tax relief

Fine Gael and Fianna Fail TDs have joined together to block a plan to abolish tax relief on private health insurance, dealing a significant blow to plans to separate the public and private healthcare systems.

At Wednesday's meeting of the Oireachtas Committee on the Future of Healthcare – tasked with producing a blueprint for the health system for the next 10 years – members voted in favour of a Fine Gael amendment to the draft report which excised a commitment to end tax relief on premiums paid to private health insurers.

The vote to remove the pledge to abolish tax relief is a blow to the Independents, Sinn Féin and left-wing TDs who have driven the committee’s plans to cease State support for and co-operation with private health insurance.

Sinn Féin's health spokeswoman Louise O'Reilly and other left-wing members of the committee were strongly in favour of the move. The committee's chairwoman, Róisín Shortall, said she did not speak or vote on the issue yesterday.The Clare Independent TD Dr Michael Harty joined Fianna Fáil in supporting the Fine Gael amendment.

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Watering-down

Committee sources say that the vote marks a watering-down of the proposals for the radical restructuring of the health service contained in the draft reports.

“They’ve marshalled their forces and they’re watering down the reports,” one source said.

“The stuff that had teeth is being taken out,” said one left-wing TD.

However, Fine Gael and Fianna Fáil TDs said that they are trying to be pragmatic, and to produce a plan which does not entail unrealistic costs. They have regarded much of the draft report as too expensive and not implementable.

The draft report, seen by The Irish Times, lays out a plan for a complete "disentangling" of the private and public health systems. A key element of financing the reforms and the extra public service which the report advocates was the savings to the exchequer by ending the tax relief on health insurance premiums, which costs the exchequer over €350 million a year.

The tax relief also makes private health insurance affordable for many of the almost half of the population with private cover, and removing it would have driven many consumers out of the private system.

The draft report also recommends that private care should be completely removed from public hospitals, though it is expected there will be further votes on these plans at the committee next week.