Health insurance tax relief should be abolished

EQUITY is one of our core health system principles, meaning that care is provided on the basis of need and not on ability to pay.

In 2004, a study by the Health Equity Research Group of the OECD found that access to hospital care in Ireland was one of the most inequitable in the OECD. The same research found that parallel private health insurance (PHI) was a major contributor to this inequity.

Around 50% of the population, mainly higher middle-income individuals, purchase PHI.

According to the November OECD economic outlook for Ireland and the 2009 Commission on Taxation report, the Government spent nearly €500 million subsidising PHI purchase and medical expenses, commonly referred to as government tax expenditure but in reality a covert tax.

The OECD and the commission have recommended modification of the tax relief on insurance premiums and health expenses. Nonetheless, they did not consider the impact of such relief on equity in healthcare, despite indicating that the main reason for limiting this type of government expenditure in taxation terms is its fundamentally inequitable impact on taxpayers.

I wonder if the commission had been aware of the aforementioned health research, would it not have recommended its abolition? Given that equity is a core government healthcare principle, a Dáil truly concerned with its own health principles should have abolished this expenditure.

It would be more equitable and efficient if this expenditure was used on developing intensive care facilities in Crumlin Children’s Hospital, on removal of the prescription charge and reducing the need for budget cuts scheduled for public hospitals and GP services next year.

A reduction or abolition of health insurance subsidisation would represent a relatively small income burden for higher income categories of employees in the private and public sector, would not impact seriously on PHI purchase and could be more efficiently and equitably spent protecting frontline GP and public hospital services.

Neither the Government nor the opposition has indicated any intention of following the recommendations from the OECD or Commission on Taxation, and the Government has now introduced a prescription charge for medical card-holders, who are on the lowest incomes and in the worst health. These same individuals are now being asked to contribute another €25 million to government coffers through this inequitable user charge.

At some point, a genuinely principled government will have to address the inequity in access to healthcare generated by the financing system.

Sadly, we must not hold our breaths for the current Dáil to address this issue.

Dr John Barton

Beechlawn

Ballinasloe

Co Galway