The Government has been warned that the removal of private healthcare from public hospitals could result in “an unavoidable and significant increase in the cost of holding private health insurance”, with the possibility that some premiums could double.
In a letter written by Irish Life Health to the Department of Health on April 13th, the insurer expressed concerns about the impact of plans to amend regulations for minimum health insurance benefits.
Currently, health insurers must provide a minimum level of benefit in all contracts, including listed health services provided in both private and public hospitals.
It is proposed that the regulations would be amended to remove the requirement to offer private care in public hospitals, in line with the Sláintecare reform plan.
He expressed concerns that a ‘large cohort’ of younger customers would likely give up holding private health insurance altogether rather than purchase more expensive plans
Following a meeting between Department of Health secretary general Robert Watt and Irish Life Health managing director Gerard Davis in March, Mr Davis wrote to Mr Watt warning that this would greatly reduce the value of entry-level health insurance plans, which are popular with younger customers.
In the letter obtained by The Irish Times through a Freedom of Information (FOI) request, he expressed concerns that a “large cohort” of younger customers would likely give up holding private health insurance altogether rather than purchase more expensive plans.
He also noted that limited or non-existent maternity and child healthcare in private settings would lead to a similar reduction of health insurance uptake among those cohorts.
With older, riskier customers making up a larger proportion of those holding health insurance, Mr Davis warned that it is “inevitable” that there would be “significant premium increases” for both new and existing customers.
“Even apart from the current significant medical inflation and resulting rising claims costs, we estimate health insurance premiums for some people (eg those who currently opt for entry-level plans) could potentially double in such a scenario,” he said.
Exacerbate pressure
The letter warned that removal of private care from public hospitals could also exacerbate existing pressure on the public system, as patients are “priced out” of private healthcare.
Irish Life Health suggested that the Department of Health should take a “more measured” approach, where public hospitals would have designated bed capacity for privately insured patients that would reduce gradually over time and eventually be eliminated.
In a statement to The Irish Times, the Department of Health said that there ‘may be an impact on the private health insurance market as a result of the removal of private care from public hospitals’
“This more gradual transition would allow time for health insurers to devise new offerings that would appeal to younger customers and solidify the system of community rating,” said Mr Davis. Community rating means that insurers must charge the same amount for a given level of cover, regardless of age, sex or health status.
In a statement to The Irish Times, the Department of Health said that there “may be an impact on the private health insurance market as a result of the removal of private care from public hospitals”.
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“The vision of Sláintecare is to achieve a universal single-tier health and social care system, where everyone has equitable access to services based on need, and not ability to pay. The Sláintecare Implementation Strategy and Action Plan 2021-2023 notes that the removal of private practice from public hospitals is a core principle of Sláintecare, ensuring that public healthcare facilities are used for public patients only, and that public patients can access public hospitals based on clinical need,” said a department spokesperson.
The department said that the recently introduced Public Only Sláintecare Consultant Contract will begin to remove private care from the public system, but that a number of consultants are likely to retain existing (pre-Public Only) contracts for some time.
The department added that it had asked Irish Life for its views on the matter “alongside other reforms being progressed under Sláintecare to allow sufficient time to put in place the necessary improvements in capacity and care models”.
