Universal Health Insurance: Introduction of UHI has potential €2k cost for each taxpayer

A report projecting the potential cost of introducing Universal Health Insurance (UHI) into the Irish market indicates it could cost taxpayers between €1,200 and €2,000 each a year.

The working paper ‘Income-Related Subsidies for Universal Health Insurance Premia: Exploring Alternatives Using the SWITCH Model’ was conducted by experts from the Economic and Social Research Institute (ESRI) and indicates that whatever model might be employed, there would be a significant cost to the taxpayer and the State.

It looks at the taxation for and subsidising any UHI system, and indicates that the cost associated with it might make it difficult for the Government to implement.

“Under the proposed UHI structure, a new compulsory insurance premium would substitute for a substantial portion of the tax financing of healthcare,” it read.

“An income-related subsidy, financed from taxation, is a central element of the proposed policy, but the Programme for Government and the White Paper [on Universal Health Insurance, issued last year by the Department of Health] gives only a very broad indication of the nature of the income-related subsidy envisaged: ‘The State will pay insurance premia for people on low incomes and subsidise premia for people on middle incomes’.”

According to the report, a subsidy system compatible with the Government statement on UHI could include a full subsidy up to a given income limit, an income limit defined in terms of either gross or net income, and adjusted depending on family size and composition; a stepped or “tiered” approach, with income cut-offs defining successively higher income bands for which lower subsidy levels would apply; and a “tapered” approach, whereby subsidy levels would reduce by some proportion of the higher levels of income.

However, the potential cost of that taxation — and the cost of a subsidy from Government for those who needed it — could be in the order of €1,200 to €2,000 a year, depending on what health services are in any particular model.

One ‘basket’ could cover hospital care, mental health care, and GP services, another could add primary care services, while a third would include prescription medications.

One of the authors of the report, Tim Callan, said any system would require “trade-offs” amid a potential cost to the State of up to €6.3bn to subsidise UHI. He said other countries that operate different UHI systems tend to have much higher taxes but also tended to have larger populations, making it more competitive for the private insurers who also play a role.

“There are problems with transition from one [system] to another,” he said.

He added that the ESRI is to carry out research on levels of unmet need in the health system.