Middle-income families face €700 million in tax hikes

Middle-income families face a “double whammy” of tax hikes in health insurance costs and the abolition of mortgage interest relief, the Dáil has heard.

Fianna Fáil finance spokesman Michael McGrath claimed “middle Ireland” faced tax increases of €700 million over the next five years including €3,200 a year for health insurance for two adults and two children under new proposals.

He was criticising the Government’s White Paper on Universal Health Insurance (UHI), which, he said, raised more questions than it answered. The document did not state what the cost would be to individual families or the State or what income threshold would determine whether the individual or the State paid for cover.

Minister for Education Ruairí Quinn said there were many questions that could not be answered until the consultation process was completed but "the whole purpose of the publication of the document is to have an informed debate".

Expensive
Taking Leaders' Questions in the Dáil yesterday, Mr Quinn said the current "unfair two- tier system" was simply not working and was very expensive by international standards.

It was not working for families who could not afford insurance or for those struggling to pay for private health insurance only to find their premiums increasing each year.

Mr McGrath said it looked “pretty clear that the current tax relief on health insurance policies will be phased out and probably cut altogether by this Government”.

That would be on top of the complete abolition of mortgage interest relief by 2017. It will be a “double whammy of tax hikes for middle-income families in this country”.

And he said Minister for Public Expenditure Brendan Howlin had contradicted Minister for Health James Reilly when he said that "no one will have to pay extra".

But Mr Quinn said the Labour Party was the first to propose universal health insurance and Fianna Fáil ridiculed the policy in its entirety.

He said a person’s access should be based on health need and not the amount of money in their pocket. And this Government was the first to deal with the “root of the problem” in the structure of the health service and the first to commit to a universal GP service.

Supported UHI
Mr McGrath said he fully supported the idea of a universal health system "but I don't support handing it over to private for-profit health insurers and that is what this policy is about".

He said all the indications were that it would be private health insurance companies who determined the nature of access to healthcare, and he suggested the other way to fund universal health insurance was through the tax system.

The Cork South-Central TD claimed the Government was “driving people out of the market. Thousands and thousands of people are dropping their health insurance because of changes in Government policy.”

He said that people who could not afford insurance were facing a bill of €3,200 for two adults and two children under plans for universal insurance.