Health insurance only reinforces our unfair, two-tier system
Published 28/04/2015 | 02:30
Health insurance deadline day - or the drive to push more young people into private health insurance as an ageing population puts extra pressure on the health system - is looming.
Health Minister Leo Varadkar is encouraging it by admitting he took out a new policy recently. You see, with our health service creaking badly despite devouring a quarter of all government spending, private health insurance can easily frighten consumers into trying to buy their way out of trouble and jump waiting lists.
Under lifetime community rating (LCR), anyone aged over 35 who doesn't have private health insurance on April 30 will be faced with higher prices if and when they do take out a policy. It will mean those of us over the age of 34 who take out health insurance for the first time will face a 2pc per year penalty on their health insurance. For a 50-year-old, that represents a 32pc increase, while people 69 and older will hand over the maximum penalty of 70pc.
Ireland has a community-based system of health insurance, as opposed to the risk-weighted system in the UK, and so everyone pays the same for their insurance, regardless of their age, and despite the fact that the older you are, the greater the risk that you will be making claims. We do have a health insurance levy in place to compensate those insurers who have an older customer base, but the levy wasn't encouraging younger people to come into the market and some 300,000 people have dropped out of the private market over the past few years.
So the LCR is being introduced, to frighten more of us young people to take out private health insurance, thereby helping to spread the costs of older and less healthy people across the market.
So what do you get for the mounting costs of private health cover? In most cases, nothing at all. In an accident situation or if you arrive in hospital with a heart attack, the public system will look after you perfectly well because accident and emergency units prioritise patients on medical need, not on the basis of whether they're covered by health insurance. And when you're admitted, especially to a public hospital, it's a lottery whether you'll get the private or semi-private bed that private health insurance supposedly entitles you to. It is only in the case of so-called elective surgery, which is anything from hip replacements to ingrown toenails, that cover comes into its own.
Private insurance allows you to circumvent the system by opting for private treatment, rather than becoming another statistic on the interminable waiting lists.
There's a myriad of cheap options out there but patients with cheap health insurance plans could find themselves at a disadvantage, as public waiting list initiatives favour those without insurance. The very basic health insurance cover in cheaper plans is of little or no use at all.
Besides, consumers can fall back on the tax system to help take much of the sting out of the cost of private medical treatment. This is because most medical expenses, including GP visits, can be written off against tax, meaning private health insurance is redundant for healthy, younger tax payers.
When universal health insurance (UHI) is introduced, LCR will no longer apply, so I'm inclined to wait and see what happens. Under UHI, everyone will be required by law to take out private cover. And what really needs to happen is radical reform, like a common waiting list for all public and private patients. This way, waiting times for public patients would fall while waiting times for private patients would rise but all patients would be treated on the basis of medical need, not ability to pay.
I'm not signing up until the Government ends this invidious two-tier system and comes up with something fairer for us all.