Press Release

Statement on Risk Equalisation and on €125 million insurance payments

The Government has approved the text of a Bill for a new Risk Equalisation scheme in the private health insurance market, to apply from 1 January next. The Health Insurance (Amendment) Bill 2012, which will be published tomorrow, delivers on the Government’s commitment to introduce a strengthened Risk Equalisation Scheme to replace the current Interim Scheme that expires on 31 December.

Risk Equalisation is designed to take account of differences in health insurers’ costs that arise due to the age or health of their customers.  It protects our system of community rating, whereby older and sicker people can buy health insurance for the same price as younger and healthier customers.

The Bill will be enacted by the end of this year, in advance of its implementation from 1 January 2013.

Meanwhile, Minister James Reilly welcomed progress on the agreement that has been reached between his Department and private health insurers to an accelerated payment of some €125m to publicly funded hospitals in 2012.

The system involves improved cash-flow between now and the end of the year, and will provide much needed funds for hospitals in the coming months to the end of December.  The money is a once-off payment in respect of private patients who have already been treated in publicly funded hospitals, but where the detailed claims have not yet been received by insurers. The effect of the €125 million will be to reduce the overrun in the HSE.

The Minister welcomed the agreement, and noted that the legal details are now being worked out between the HSE, voluntary hospitals and insurers involved – Aviva Health, Laya Healthcare and the VHI.  The funds from the agreement will come on stream in the next few weeks.