An outstanding policy failure on universal health insurance

A failure compounded by the absence of a competitive insurance system to keep costs under control

 

The Government has effectively abandoned its plans for universal health insurance (UHI) and used costings and analysis from the Economic and Social Research Institute (ESRI) to justify its belated decision. In 2011, the programme for government promised implementation of the new scheme by 2016. Now Minister for Health Leo Varadkar admits it could be a further five to 10 years – ambitiously involving a third term in government – before even a modified form of universal healthcare could be put in place.

Last year, the Government published a White Paper on its proposed health insurance model. It did so without providing either costings for UHI or details of the services that UHI would cover. For the Government to propose such a major change in health insurance in 2011 – just after Ireland entered a bailout programme – was questionable. But since then the failure to estimate the likely cost of implementing UHI is both inexplicable and inexcusable.

Why has it taken almost five years to establish the cost of its own proposal? Mr Varadkar has accepted that the ESRI study, which was based on the White Paper details, clearly shows the Government’s proposed model “is not affordable now or ever”.

And this, he acknowledges, is because of the very large premiums that families would have to pay, and the cost to the exchequer of subsidies to finance insurance premiums for medical card holders and those on low incomes.

The ESRI in its report estimated the Government’s proposals would increase overall healthcare spending by at least 3.5 per cent, and by possibly as much as 11 per cent. When introducing the White Paper last year, then Minister for Health Dr James Reilly said: “I am determined that total spending by the State on healthcare in Ireland under a single-tier UHI system should not exceed its total spending under the two-tier system which it replaces”.

The Government based its plans for UHI on the assumption that a competitive insurance system would keep costs under control and keep prices down. But given the small size of the Irish market, 4.5 million people, and the evidence elsewhere, that was always a questionable assumption.

Earlier this year a World Health Organisation report found that in countries where competitive health insurance systems operate – Germany, the Netherlands and Switzerland – they have not been effective in controlling health care costs.

For Fine Gael, UHI proved a vote winner in the 2011 general election. However, the party’s failure to cost its own proposals then, and the Government’s subsequent failure to do so until now – despite two Fine Gael ministers holding the health portfolio – represents the outstanding policy failure of the Coalition administration.

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