Tax relief on private health insurance to cost €500m, says Kenny

The cost of health insurance tax relief is estimated to be €500 million this year, Taoiseach Enda Kenny has said.

He said the cost had increased by 24 per cent, from €404 million in 2011 to €448 million last year.

"There are now 259 health plans, which is a recipe for mass confusion about who has what,'' said Mr Kenny.

The Taoiseach said the Revenue Commissioners, who made individual payments, PRSI number by PRSI number, had said some 50 per cent of people would be affected by the reduction in tax relief.

Fianna Fáil health spokesman Billy Kelleher said the figure was high because premiums were going up.

Standard levels
Party leader Micheál Martin said Minister for Finance Michael Noonan had said he was cutting tax relief on "gold-plated'' insurance policies which was not affecting the majority of individuals who availed of more standard levels of medical cover.

“In the hours after that the real and full story emerged; that the removal of the tax credits will impact on people with a basic level of health insurance.’’

Mr Martin said the VHI had confirmed that only 10 of its 93 policies would not be affected. Insurance Ireland had said the minimal additional cost would be €100 for basic policyholders and up to €360 per family.

He said this would result in more families with children, and particularly older people, bearing a heavy burden for private health insurance.

"It is instructive that approximately 134,000 people under the age of 60 left private health insurance between 2011 and 2012, while approximately 23,000 over 60 have joined. We need balance in the market and this is not sustainable.''

Back working
Mr Kenny said the budget's design and focus were to get the country out of the bailout programme. It was also designed to get the country back working again through a range of measures.

He said the objective of Minister for Health Dr James Reilly was to reform the health system and bring about a single-tier health service based on need and not on ability to pay.

“The Government is committed to the ongoing sustainability of the health insurance market as part of the transition to the market-based universal health insurance scheme,’’ said Mr Kenny.