Health cover penalty plan a non-runner
Instead of going down the costly road of the once much-vaunted universal health insurance plan, the Coalition now seems intent on forcing people into private insurance. Under its punitive regime of austerity, 47,000 people gave up their health insurance in 2013, while 21,000 have already left in the first three months of this year. Unable to pay exorbitant premiums, nearly 300,000 have abandoned insurance altogether.
In the present economic climate, it is hard to see how allowing private health insurers to charge even more for those aged 35 years and older, can trigger a stampede of younger customers into the market. Nor is it good enough for the Government to say insurance premiums will rise more slowly as a result. Only when the four companies in this cut-throat business offer real incentives in the form of lower premium charges will the haemorrhage be stanched.
Though a surge of new members is anticipated by the Health Insurance Authority, a body not given to hyperbole, the ink was barely dry on changes signed into law on Monday by Health Minister James Reilly (his swan-song in that role?) when an expert turned the spotlight on some evident flaws.
Simply put, Professor Charles Normand of Trinity College Dublin says the incentives are not attractive enough. If anything, he predicts a relatively small increase in the number of new customers taking up private insurance under the Lifetime Community Rating scheme and points out that those being targeted by the Government are coming under the biggest financial pressures right now.
Looking at people with big mortgages, many of them now unemployed, he said it would be “very difficult for these people to switch into taking out private insurance at this stage”. Professor Normand saw the legal change as an indication that the Government does not have confidence in the time-scale it had suggested for its Universal Health Insurance plan. Effectively, he said, the incentive being offered is that by paying more now, people could pay less in 20, 30 or 40 years, adding that by then, the system might have changed.
With Dr Reilly’s moneymaking formula in their grasp, health insurance companies will be laughing all the way to the banks. Unless the cost of an insurance premium comes down, even more people in the ‘squeezed middle’ will be forced to stop paying for increasingly expensive cover.
From next May, the later people sign up for health insurance, the higher the premiums they will face. With over 35-year-olds staring at a loading of 2% a year, the Government is banking its hopes on the surge witnessed in Australia when similar changes in the health insurance law were made there.
However, comparing Ireland to Australia is not comparing like with like. Though facing structural deficit problems, Australia has experienced nothing on the scale of Ireland’s economic collapse. It is a bitter irony that thousands of bright young Irish emigrants now in Sydney, Perth and Melbourne, are unlikely to be enticed into returning to spend their latter years amid Ireland’s shambolic health system where people are paying through the nose for insurance. Health insurance firms cannot go on inflating the market simply by putting up prices in a never-ending spiral. Once dubbed Angola, whoever has the political courage to take on the health portfolio in today’s Cabinet reshuffle faces an unbelievably difficult task.
So what have we learned?
The cancellation of all five Garth Brooks concerts in Croke Park at the end of the month, is a highly embarrassing twist in this ongoing saga which, undoubtedly, will cause considerable damage to Ireland’s international image as the land of a thousand welcomes.
Vested interests on all sides of the controversy — GAA, local residents, promoters, planners, and officials at Dublin City Council — bear their share of blame for a catastrophe which will cost the economy untold millions of euro in hard revenue and potential tourism losses. But in a sense, even though his ill-advised threat to abandon all five concerts smacked of arrogance and set the scene for the axe to fall, Garth Brooks was the unwitting victim of circumstances beyond his ken. Unless we learn lessons about greed, tolerance, inclusive planning, promotion, licensing and management of major events, Ireland’s loss will be inestimable.
© Irish Examiner Ltd. All rights reserved