Madam, - Eric Haywood and Simon McGuinness (January 10th) exhibit an extraordinary attitude to paying for health insurance. They both admit that the costs of health insurance are a problem and that older people don't pay their full share. But at the same time, they don't care that someone else has to foot the bill. The issue they both miss is: who should pay extra to make up the deficit?
At present, the Irish system is based on the deficit being subsidised by younger people - people who are trying to pay huge mortgages and, in many cases, struggling to raise children. This is where the problem lies. We cannot simply carry on with such a blatantly unfair system.
But it is worse than that. We have heard much talk of the pensions time-bomb due to demographics. No one has pointed out that the Irish health insurance sector is subject to the same threat. As the number of young people falls and the number of older people rises (we're changing from a society where there were six young people per pensioner to one where there will eventually be fewer than three), the cost per head for young people will become unsustainable. The end result is clear. Premiums will have to rise to a level where it makes no sense for young people to subscribe. They would be far better off staying out of the system and just paying the medical bills themselves, or going public. At that point the system goes into meltdown as nearly everyone is drawing out resources, with hardly anyone making net payments in. It seems to me this instability is already built into the Irish system.
Here in Germany, community rating is achieved through a very different mechanism. The statutory health insurance funds (membership of which is, incidentally, legally mandatory) charge a defined percentage of salary; if you earn more, you pay more. This means that high earners, whether 25 or 60, pay over the odds. On the other hand, if you're on a low wage, on social security or on a State pension, you pay less. I think most people would accept that this is a fairer system than ours. It is also a lot more stable and less vulnerable to demographic trends. In addition, it helps to avoid the debacle of risk equalisation. - Yours, etc,
Dr NORMAN STEWART, Steinebach, Germany.