Reilly declines to state whether regulator recommended rise in health insurance levy

The Minister for Health has declined to state whether the increases in the stamp duty on health insurance products which he announced last week were in line with recommendations put forward by the regulator for the sector, the Health Insurance Authority.

Last week James Reilly said the stamp duty for health insurance products providing “advanced” cover would increase from €350 to €399 for an adult and from €120 to €135 a child.

Dr Reilly said then he was very reluctant to recommend increases on stamp duties at all, even for products providing “advanced” cover. But the measures would subsidise health insurance for the most vulnerable patients, he added.

However, some insurers warned that these measures, on top of the reduction in tax relief on health insurance subscriptions in October’s budget, could see the net cost of premiums rise by 15 per cent next year.

The Department of Health said he made his decision to increase the stamp duty having examined a report submitted by the Health Insurance Authority in October.

It said the report set out the authority’s evaluation and analysis of information returns supplied by insurers, its analysis of market issues and its recommendations for risk equalisation credits and associated stamp duty to apply for the following year. It would publish a redacted version of the authority report in due course.

Asked whether the rate of increase sanctioned in the health insurance stamp duty was in line with that recommended by the regulator, Dr Reilly told The Irish Times: "The department takes into consideration the Health Insurance Authority recommendations before it makes the recommendations we need to implement and that's precisely what happened."

The Department of Health said yesterday that as the report was not yet published, it was not in a position to provide specific details on its content.

Meanwhile Dr Reilly has also confirmed that he is considering the introduction of a system of “lifetime community rating” as part of a number of possible reforms to the structure of the health insurance market.

Writing in The Irish Times today, he says that under such a system, premiums would rise depending on the age a person first took out health insurance.

This would provide “an incentive for younger generations to take out affordable protection at an early stage”.