The annual cost of universal health insurance (UHI) to cover a standard package of benefits for one adult could be between €2,000 and €3,000, external consultants have told the Government in a confidential report.

This is far higher than had previously been estimated and is likely to further call into question the viability of the policy as it was first envisaged.

Sources said the estimated cost of a more comprehensive series of benefits could be between €3,000 and €4,000 per year.

However, it was pointed out that these figures are before any subsidies provided by the State are included.

The new projections, drawn up by the ESRI, the Health Insurance Authority and KPMG, explain, in part, the move by Minister for Health Leo Varadkar to float the idea of scaling back the scope of UHI.

Mr Varadkar has sought further research on UHI excluding primary care services or drug costs.

Universal health insurance is the Government’s main policy for reforming the health service. It would aim to abolish the existing two-tier system with a single tier system by effectively making everyone a private patient.

Under proposals originally drawn up by the former minister for health, Dr James Reilly, the Government would cover the full cost or heavily subsidise UHI for most people.

Pace of reform

A 2014 Government White Paper suggested UHI would be introduced by 2019. However, on his appointment as Minister for Health, Mr Varadkar significantly dropped the pace of this reform.

The Irish Times reported last year that the UHI plan was strongly criticised by the Department of Public Expenditure and Reform, which said it could cost an additional €5 billion and pose a risk to the economic stability of the State.

The department said a standard UHI package could cost about €1,600 per year.

Higher estimates

Dr Reilly strongly rejected this claim and suggested it could cost about €900 per year. However, the new estimates forecast that the costs could be significantly higher.

Tánaiste Joan Burton has also repeatedly questioned if the policy is affordable.

“Some of the models that have been put forward have suggested very high charges potentially for individuals and families,” Ms Burton said last week. “Some of the figures being spoken about would concern me.

“We need to look for a model that is efficient, effective and good value for money.”

Mr Varadkar has also said a “big bang approach” is not the right way forward.

However, Taoiseach Enda Kenny has said he wants the policy implemented in full, and it is understood it is still favoured by senior figures in the Department of the Taoiseach.

The policy was branded as simply another tax increase by the Opposition when it was launched by Dr Reilly last year.

In response to criticisms that it was too expensive, Dr Reilly inserted a cap on spending into his original plan. This promised that State spending on healthcare under a single tier UHI system would not exceed the total spending under the current two tier system.

The initial plan said that the amount of money people paid for their insurance would be related to their ability to pay, as a result of Government subsidies.