Proposed universal health cover model is ‘regressive’

One of the country’s largest trade unions has warned that the model of universal health insurance proposed by the Government will be “regressive” — placing an inequitable burden on low- and medium-income earners.

Michael Taft, an economist with Unite, said that the mechanism being considered by the Health Minister James Reilly — and likely to be in place by 2019 — flies in the face of social health insurance models already in existence in Europe.

While the exact cost of a proposed policy under the Government’s universal health insurance scheme is, as yet, unknown, the Department of Public Expenditure and Reform has put it at just at under €1,700.

Mr Taft, in a paper entitled Danger, Danger: the Government’s Health Insurance Model, said the cost for each insured adult in the Netherlands — the country which is supposed to be the template for the Government’s model — is €1,478.

“Let’s assume, for this argument, that the package is €1,500,” he said. “The Government is committed to exempting low-income groups (unemployed, etc) and subsidies for the low- paid, though we don’t yet know the threshold. This helps, of course. The problem lies with income groups above the threshold — in other words, those that don’t receive a subsidy.”

Mr Taft said it was clear a flat-rate payment will be more expensive — as a proportion of gross income — for those at the lower end of the salary scale.

“For instance, if you are on an average income of €36,000, the health insurance will be approximately 4%” he said. “If you are on €100,000, the health insurance will be 1.5%. That doesn’t seem very equitable: because it isn’t.”

He said other European social health insurance systems treat the cost on ability-to-pay or income-related terms.

The other aspect of the international health insurance systems identified by the Unite economist, was the contribution sought from employers. He pointed out that in Belgium and France, the employer contribution was much larger than the monies sought from the employee. For Ireland, he proposed that the contribution be at least equal for both parties.

Finally he pointed to, what he described as, “the one big elephant that no one has discussed”.

“The impact of universal health insurance — whether it’s through the Government proposals or a more equitable model — will be minimal for those who already have health insurance. For these people, it would just mean substituting one payment for another,” he said.

“The impact will be very high on those who don’t have health insurance — about 53% of the population. They will be required to purchase health insurance, unless they are covered by a state subsidy. This would mean many low and average income earners who can’t afford health insurance would be hit. What would the social and economic impact of this be?”

Q. How would universal health insurance work?

A. The two-tier system of public and private patients would be replaced by a single-tier one in which everyone would have to be covered by a form of universal health insurance. While the State would pick up the tab for the unemployed and subsidise those on low incomes, everyone else would have to pay a price for their cover.

Q. How much is it likely to cost?

A. While the Department of Public Expenditure and Reform has talked about a figure of around €1,672, the Department of Health has said the amount has not yet been determined.

Q. What will a basic package cover?

A. While that has also not been confirmed, it is likely to include free GP care, primary care, maternity and infant care, acute treatment, and mental health care access. Those interested in private hospital care would have the option of paying extra.

Q. When will this system be in place?

A. Health Minister James Reilly wants it in place by 2019.