OUR three-tier health service system is, no doubt, open to criticism on a number of grounds. It comprises a medical card system and a general medical service system, topped up by a voluntary health insurance system. If in the past we had been a wealthier country we might have arranged things differently.
But this system has the merit of ensuring that all our people are looked after regardless of income, and of age. The contrast with the much richer United States is particularly striking: in most US states provision for the poor and the elderly is inadequate and for some totally absent.
By European standards we are unusual in that no less than two-fifths of our people fund their own health care through a nonprofit-making state-run health insurance scheme; in Britain the proportion doing 59 through more than 20 private companies is only 11 per cent.
Under our system everyone pays the same premiums for any given level of cover, regardless of their age or state of their health. No one has to fear that when they retire on incomes lower than earned during their working lives, and/or when their health deteriorates, they will be required to pay increased premiums that they cannot afford, or else lose their health insurance cover.
This is achieved through cross subsidisation: the younger population pays the same premiums but makes less heavy calls on the health services, and thus in effect subsidises the older population in the scheme, a process described as community rating.
A somewhat similar system operates in Australia and in three American states (New York, Vermont and Minnesota). In Europe it exists in the Netherlands and there are apparently proposals to introduce it in Germany and France, where President Chirac has expressed strong support. And two of the relevant EU Commissioners, Monti and Flynn, have expressed themselves strongly in favour of community rating.
A DISADVANTAGE of the Irish system, however, has been that the VHI is a monopoly, and there has been general recognition of the desirability of allowing competition with it on a community-rating basis. Provision for such competition is in any event an EU requirement.
Accordingly, a Health Insurance Act was passed in 1994 providing for such competition, provided that it was on a community-rating basis, i.e. not discriminating between clients on the basis of age or health risks.
It is on the basis of the provisions of this Act that a major British health insurance company, BUPA, has decided to extend its activities to Ireland from January 1st. Its proposed scheme involves a basic premium for "essential services", which provide cover more or less equivalent to VHI's Plan A at a roughly similar premium.
BUPA is not offering alternative plans with higher cover, equivalent to VHI's Plans B to E. Instead, it is offering what it describes as "cash plans", with premiums which for people aged under 50 are substantially lower than the VHI rates for the equivalent Plans B to E. For cover equivalent to Plans C to E they are about 20 per cent lower, but are jacked up by 30 per cent at age 50 and by a further 10 per cent at 55.
To evade the provisions of the legislation designed to safeguard community rating these "cash plans" are, however, expressed as being unrelated to health needs. But they are, of course, a very thinly disguised health-insurance provision, their purpose being self-evident: they would enable BUPA to undercut the VHI for all age groups under 50, leaving our State scheme to carry the high-risk over-50s.
This scheme has been proposed in defiance of the fact that last May the Minister of State for Health made it clear in the Dail that "any move which would threaten or undermine the core value of community rating will be met decisively either by the use of existing laws and regulations or, if necessary, by new legislation. Community rating has served the Irish people too well over a long period of time to allow any interference with it to be tolerated".
IT should be made clear that the effect of the proposed BUPA scheme would be disastrous, not just for VHI but for our entire health service. For, faced with the loss of premiums from the three quarters of its members who are under 50 and who make limited demands on health insurance, the VHI could stay in business only by raising astronomically the premiums on the one-quarter of its members who are over 50.
This would inevitably lead to many members becoming unable to afford to remain in the scheme, while others would downgrade their cover; this would in turn entail a major shift from private to public treatment, disturbing the established private/public balance and shifting much more of the burden of care on to the already overloaded public hospital system. The cost to the taxpayer of replacing private by public beds on a substantial scale could ultimately become very large indeed.
Clearly we cannot afford, and must not tolerate, this kind of undermining of our health services. Accordingly, following receipt of advice from the Attorney General, which is reported to have found the BUPA scheme illegal, the Minister for Health, Michael Noonan, announced on Friday week, in cautious language, that the BUPA integrated insurance package comprising a community-rated indemnity product and an age-rated cash plan "may contravene the definition of a health insurance contract as set out in the Health Insurance Act, 1994".
And he added that eight days ago his Department met BUPA to begin intensive discussion with it on its schemes, and that he hoped recourse to legal action could be avoided.
Given that BUPA proposes to start selling its scheme on January 1st, it is vital that this issue be satisfactorily dealt with before that date by the withdrawal of the present BUPA scheme and its replacement by a genuine community-rated scheme. Should this not be agreed within the next three days, the Minister should not hesitate to take the necessary legal action to halt the initiation of the present BUPA scheme.
Moreover, if necessary he should announce at the same time his intention to introduce amending legislation to remove any purported ambiguity in the present law, upon which BUPA may have sought to rely. There would, I am sure, be unanimity among the political parties on whatever small amendment might be required.
What is at stake over these few days is far too important to our society for anything to be left to chance.
Note: As someone aged 70 I declare my interest in this matter, and wish all my readers a Happy New Year!