Minister to release advice on health cover

Minister for Health Mary Harney will make available the advice she received from an actuarial company against moving to health insurance risk equalisation.

She rejected a Labour Party claim that she had "capitulated to the strong and over-the-top lobbying from one particular insurer", since the Health Insurance Authority (HIA) recommended moving to equalisation.

The decision was a "close call" and if a lobby was to affect her decision it would have been the biggest and not the smallest that did so, she said.

Ms Harney was speaking during a Dáil debate on her decision not to move to risk equalisation. This would have meant that the VHI's biggest competitor, Bupa - and eventually Vivas and any other new insurers in the market - would have to compensate VHI for the fact that its customers are older, more at risk and therefore less profitable than those of the new insurers.

Once triggered, it would be impossible to turn back the clock on equalisation, Ms Harney said. "Therefore we must ensure we are getting it right before triggering something that we know will have a major impact on the market."

She added, however, that "I remain a strong fan of risk equalisation and we cannot have community rating without it. It is not a question of whether we will do it but rather when."

The Minister told the Dáil that a number of years ago the Department of Health appointed Mercer, "a leading international actuary firm. The advice is always balanced and there are very strong reasons to do it and also not to do it.

"Mercer advised me on balance not to do it and I am prepared to make its advice available. I also had advice from the HIA and my own advisers."

Labour spokeswoman Liz McManus said, however, she did not accept that the firm "has a higher level of wisdom and knowledge. Mercer is a private consultancy firm advising the Minister."

The HIA was established by the Oireachtas "to act as the supreme body to ensure a decision made by a Minister was an informed one and that the very best advice was being given".

Ms McManus accused the Minister of "now taking advice from private consultants in the commercial arena and is disregarding an authority whose remit is to protect the common good".

Fine Gael's health spokesman Liam Twomey asked what was being done to improve competition. He pointed out that since 1997 VHI premiums had doubled for the average consumer.

"If costs increase, the people who most need private health insurance, that is those on marginal income and the elderly, will find they cannot afford it.

"We must ask ourselves why, after so many years, there is still only one major new entrant in the market," Dr Twomey said.

Green Party leader Trevor Sargent said "a far more holistic view needs to be taken as regards the cost of health insurance so that effectively there is not such a burden of cost on the individual citizen, regardless of whether they are taxpayers when it comes to health matters".

Arthur Morgan (SF, Louth) said the Minister's decision was "based purely on her ideological outlook".

He believed that she had hired private consultants "simply because she knew they would give her the results she wanted".