Forget GSOC and focus on issues that matter

Unless one is able to read the murkiest of tea leafs, one would be totally confused about what is going on in GSOC at the moment.

What looked like a potentially serious story a week ago is now starting to turn into something resembling a farcical soap opera. I have over the years had a bias towards defending our politicians in the face of relentless criticism regardless of what they do or do not do.

However, even the biggest defender of the system would be perplexed and more than a bit disillusioned with the manner in which our political system is handling the issue. It appears that the only real winner is the Insomnia coffee chain, which is latching on to its innocent involvement in the controversy with a superb marketing campaign.

It is just as well that there are some winners in this sorry mess, because the rest of us are being treated to politics at its very worst and a media that seems hypnotised with the whole event. Unfortunately it is distracting us from some very real economic-related stories.

This week Aviva Health insurance announced that it is going to increase its health insurance premiums by an average of 12.7% in March. Excluding this latest increase, average health insurance costs increased by 8.7% in the year to December. Over the same period, average consumer prices increased by just 0.2%. Since January 2005 average health insurance costs have increased by 180%, while average consumer prices increased by just 14.7%. By any standards that is one hell of a painful increase.

The latest price hike by Aviva is being justified by the new public bed charges, the increase in the risk equalisation levy, which means that the other health insurers have to justifiably subsidise the VHI because of the significantly older age profile of VHI members, and the increased costs of claims.

For many people, this latest increase, which follows recent hikes by the other insurers, will make the product totally unaffordable.

The increases are just compounding the mistake Michael Noonan made in the last budget when he reduced tax relief on so-called ‘gold-plated’ insurance policies, many of which are anything but gold-plated. I suspect that the Department of Finance or at least the minister cottoned on to the fact that the reduction in relief was a penal mistake within days of the budget, but a political U-turn was not deemed feasible.

This week the Health Insurance Authority (HIA) estimated that the percentage of the population with inpatient health insurance has dropped to 45%, down from a peak of 51% in 2008. Last year 47,000 people dropped their private health insurance policies.

At this stage many hard-pressed consumers can justifiably question the affordability of health insurance, but the more people who drop their health insurance, the more pressure will be placed on the public health system, which is already under an unbearable strain.

The Government came into office pledging to introduce a system of universal healthcare, but with the exception of the dubious decision to grant free GP care to young children in the budget, we would still appear to be light years away from the universal model.

The fact is that Minister Reilly is under considerable pressure to cut health expenditure at the same time as he is in theory seeking to introduce the universal healthcare model.

Access to a high-quality affordable health service should be the key quality of life aspiration for policy makers, with education a close second. Both are now under serious pressure and it is not obvious how the quality of both services can possibly be maintained or improved in an environment of ever-scarcer resources. Please politicians, forget GSOC, and focus on issues that really matter to our lives.


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