A €55 million financial surplus generated by a health insurance scheme that was in place up to the end of 2012 to underpin the market has been absorbed by the exchequer.
The windfall arose following the closure of the interim age-related tax credit scheme in the health insurance market. It was in operation from 2009 until the introduction of a permanent risk-equalisation scheme in the health insurance market in 2013.
The Irish Times reported last year that the surplus in place at the closure of the interim age-related tax credit scheme was of the order of €55 million and that the then Minister for Health James Reilly had directed his officials to seek a meeting with the department of finance as part of a process aimed at determining how the surplus would be spent.
At the time there were a number of options mooted as to how the money could be distributed.
These included giving the money back to the insurers who were in the market over the three-year period to 2012. One argument is these proceeds could be used to boost the VHI's reserves to facilitate authorisation by the Central Bank, as long demanded by the European Commission.
Risk-equalisation scheme
Another school of thought was that the money could be invested into the new risk-equalisation scheme in place since last year, a move that could offset further increases in the levies on health insurers, which some blamed for price hikes.
There was also speculation that the Government could use the surplus to offset financial deficits in the HSE.
Highly placed sources said at the weekend that the surplus had now been absorbed by the exchequer.
