CHANGES IN TAX relief on private health policies announced in this week’s budget will raise costs for 90 per cent of customers.

The Health Insurance Council said the budget cap on tax relief on health insurance policies will affect 1.4 million customers.

Health Committee

Speaking at the Health Committee, Minister James Reilly said he only heard about the change when it was announced by the Minister for Finance Michael Nooonan in his Budget speech, and said he wasn’t informed prior to the change. He said:

I found out the same time as all my other colleagues.

Insurance Ireland Health Insurance Council state that the government was incorrect in saying  that it would only affect “gold-plated policies”.

Miscalculation

They added that this was a “fundamental miscalculation regarding the number of customers impacted will exacerbate the issues of sustainability and affordability at a time when the market is already significantly contracting”.

They said that if you look at the average policy premium – a gross rate of €1500, prior to the change, the net cost of this for an adult was €1200 but following the change, the cost is now €1300 – an increase of €100 per adult.

Furthermore, the Council also challenges the Government’s estimate of those affected – approximately 577,000 policy holders – believing the wider impact to be far greater.

Private health insurance

According to its own industry data, the Council estimates this figure to be 90 per cent with private health insurance.

Michael Horan, spokesperson for the Insurance Ireland Health Insurance Council, said the new Budget measures will seriously jeopardise the reform already made in the healthcare sector, stating:

The €127 million reduction in tax relief combined with the public bed charges of €30 million means that an additional €157 million needs to be raised by the end of 2014.

This will ultimately have to be funded by customers through their premiums. We urgently call on the Minister to review this measure and consult with health insurers on the issue…

Speaking on RTE’s Morning Ireland, Fianna Fáil’s Billy Kelleher said he was surprised at Minister Reilly’s admission that he was not made aware of the change and said it showed there was dysfunction between the departments.

Read: “There has been no change in policy in relation to medical cards” – James Reilly>

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