Health insurance companies have warned of further premium hikes unless the Government amends plans to introduce controversial charges for private patients in public hospitals from January.
If the Government fails to amend the charges outlined in the Health Amendment Act 2013, insurers will be billed for costs of up to €1,000 for private in-patients who occupy public beds, compared to the current charge of €75.
Health economics lecturer at University College Cork, Brian Turner, said it could push up premiums by between 15% and 20%.
Yesterday, Insurance Ireland, the health insurance council, urged James Reilly, the health minister, to amend the legislation on the grounds that the proposed charges are based on a flawed estimate.
Dr Reilly claims the new charges will raise €30m in a single year but the insurance council said two independent assessments put the figure at €130m.
It said Dr Reilly had acknowledged last July the disparities in the estimates and committed to amending the legislation in the autumn to ensure that the new charge would raise €30m only in 2014.
However in a statement last night, the department said it intends to press ahead and introduce the new charges on Jan 1 and that it considered the council’s figure of €130m to be “a significant over-estimation of the revenue that public hospitals will receive in 2014 as a result of the new charges”.
It said the minister would keep the rates under review in respect of this revenue target for 2014 and that the department intends to contact health insurers shortly to outline its position.
However, CEO of Insurance Ireland, Kevin Thompson, said his body was calling on the minister to act “as a matter of urgency” and amend the legislation.
“We have provided the correct rates to enable the minister to do this,” he said. “It is in everyone’s interest that a viable public and private health system operate as they are inextricably linked.”
Dr Turner said while he understood the minister’s motivation in trying to end cross-subsidisation of private beds by public hospitals, the new charges could backfire for public patients.
“What happens if you have a private patient and a public patient in need of a bed? How are bed managers expected to make that decision when a private patient generates revenue for the hospital under the new charges?”
He said the timing was not ideal following the recent hike in the health levy and the budget decision to cut tax relief on private health insurance, the combined effect of which was to add around €330 onto the cost of health insurance for a family of two children and two adults.
He said consumers were being forced to further drop the level of private cover they had, resulting in greater pressure on the public system. Almost 240,00 people have cancelled their health insurance policies since 2008.
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