Risk equalisation was a necessary feature in a community-rated health insurance market, Minister of State for Health Tim O'Malley told the Dáil.
He said that before the enactment of the Health Insurance (Amendment) Act 2007, legislation allowed new entrants to the market, such as Vivas Health, to avail of a three-year exemption from the obligation to make risk equalisation payments.
"When the original legislation was enacted, the Oireachtas intended that the exemption should be confined to new entrants which were coming into the market to build market share from scratch, using normal business practices.
"The risk equalisation scheme provided for such an exemption for new market entrants. The Government considers that the exemption has to be removed to protect the operation of the community-rated market, which means that related changes have to be made to the risk equalisation scheme." He said that the primary intention of the amended scheme was to balance the twin objectives of promoting competition in the health insurance market while at the same time protecting the integrity of community rating, both of which were to the benefit of the consumer.
Fine Gael spokesman Dr Liam Twomey said the measure was another indication of the Government's failure.
"This is another opportunity to give patients a harsh dose of PD medicine. It is clear from the Minister's press statement that the purpose of this measure is to privatise the VHI. It is nothing to do with mutualisation."
Labour spokeswoman Liz McManus said she had great concerns about the shift being made by the Government on community rating. "This is all the more curious given that the Government fought for risk equalisation and won handsomely when it was challenged in court. The Government is now diluting the risk equalisation provisions in a way which is not necessary. This certainly relates to some kind of payback connected to Bupa's withdrawal from the Irish market."
Sinn Féin spokesman Caoimhghín Ó Caoláin said that the motion would further hamper the VHI in the first instance and would undoubtedly lead to higher premiums for people who were doing their business with that company. "Older people, people on pensions and in other circumstances, from their 40s onwards, will find themselves bearing an even greater cost to access healthcare in this State."
Joe Higgins (Socialist Party, Dublin West) said there should be a public health service to which each citizen was entitled.
Green Party spokesman John Gormley said he agreed with the other Opposition speakers, arguing that the Government's health policy was in a shambles.
He said that as health premiums increased, more and more people would not be able to pay them, and they would be forced back into the public health service which had been run down.
The motion, giving effect to the changes, was passed by 53 votes to 36.
