Health Minister James Reilly is to prepare a position paper on the issue for the Cabinet outlining how savings could be made.
The move, which carries major political risks, is a direct consequence of the overspend in the health services, and could increase the pressure on Dr Reilly.
It could create divisions in the Coalition, with Labour backbenchers, in particular, likely to be unhappy if cuts to the scheme are proposed.
However, it was not immediately clear last night whether the review would apply to existing card holders or solely to future applicants.
An additional 125,000 medical cards have been issued this year, bringing the total number of holders to 1.8m. Each card is estimated to cost the State about €1,000 a year. There are also about 125,000 holders of GP-only cards, which entitle people to see their doctor for free.
The Cabinet’s decision to consider “reforming” the eligibility criteria is revealed in a draft of the latest European Commission review of Ireland under the bailout programme. It outlines how the Government has struggled to contain the health overspend this year, and resorted to a number of one-off savings measures which “may need to be replaced with permanent structural measures” in the budget.
“From this perspective, the authorities have indicated their intention to consider, in the context of Budget 2013, reforming the medical card/GMS eligibility and maximising the flexibility under the Croke Park agreement through new working models.”
The document says that of the €543m in health cuts announced last December, “only 22% of the planned savings have been achieved, and the authorities are finding it challenging to deliver the remainder”.
In addition, an extra €317m in costs has been racked up because of higher than expected demand and “higher-than-approved provision of some services”.
Fianna Fáil’s health spokesman Billy Kelleher said reforming eligibility criteria would mean “an attack on the most vulnerable” and be a direct consequence of the minister’s deeply flawed budgetary estimate last December.
On the overall budget in December, the commission said the Government was in agreement that “the needed consolidation efforts, both in terms of reducing expenditure and increasing their efficiency (including by enhancing their targeting to the most vulnerable) and of raising new and stable revenue, are likely to require difficult political choices”.
Click HERE for the draft copy of the latest European Commission
staff review of Ireland under the bailout programme