20th June, 2001
Section 1 agreed to.
SECTION 2.
Mrs. Jackman: I move amendment No. 1:
In page 3, line 20, after "services," to insert "out-patient services or general medical practitioner services,".
This is an extremely important Bill and we hope, within Fine Gael policy, to provide health care to everyone through the introduction of health insurance for all, but today we are dealing with this
Bill. This amendment was also tabled in the Dáil and the Minister dealt with the points raised there, but I would like him to reiterate his position and prove once and for all that out-patient services or general medical practitioner services are included in the definitions.
Minister for Health and Children (Mr. Martin): This amendment was addressed by an amendment I put down on Committee Stage in the Dáil which inserted a definition of relevant health services in the published Bill. As relevant health services are defined as including out-patient services and general medical practitioner services, this amendment represents a repetition but I understand that the Senator wanted to raise the issue. We have covered this and it is accommodated in the Bill.
Mrs. Jackman: I accept that and will not press the amendment after that positive response from the Minister.
Amendment, by leave, withdrawn.
An Leas-Chathaoirleach: Amendments Nos. 2 and 3 are related and may be taken together by agreement.
Mrs. Jackman: I move amendment No. 2:
In page 3, lines 24 to 27, to delete all words from and including ", directly" in line 24 down to and including "arrangement," in line 27.
I would be very interested in the Minister's response to this amendment. I know he responded in the Dáil but I would like him to reiterate his position here.
Mr. Martin: Amendment No. 2 seeks a deletion from the Bill of terms which prohibit cash plans from paying benefits directly to health service providers. This requirement is intended to ensure that there is a clear distinction maintained between cash products and indemnity products. In the interests of clarity for consumers I want to minimise the possibility of a situation recurring such as that dealt with by Deputy Noonan as Minister for Health when a question could arise concerning the establishment of a Lego effect between risk-rated cash and community-rated indemnity plans. The intention in the section as published is to keep clear blue water between these two different types of insurance. On that basis I do not propose to accept the amendment.
Amendment No. 3 has already been met by the amendment accepted on Committee Stage in the other House. The section now incorporates wording which exempts from the definition of a health insurance contract any insurance contracts, or any insurance arrangements, the sole purpose of which is to provide for the making of payments in respect of sickness, injury or disease of amounts calculated by reference only to the duration of the treatment of the sickness, injury or disease. Amendment No. 3 has, in essence, been accepted in the other House.
As I want to keep clear blue water between the risk rated cash and community rated indemnity plans, I do not propose to accept amendment No. 2.
Mrs. Jackman: This restriction in relation to amendment No. 2 was not provided for in the White Paper. What I was trying to do was to restore the direct payment currently enjoyed by thousands of cash plan holders.
Mrs. A. Doyle: I apologise for missing the start of the debate as I had to get my notes. We are still on section 2 dealing with amendments relating to the definition section. I want to raise a point about the Voluntary Health Insurance which has come to my attention. You can, a Chathaoirligh, assist me by letting me know whether I am in order.
We are discussing services and out-patient services generally, and the total package of health insurance as distinct from simply the end delivery of cash payment when everything has been agreed. I do not know if the Minister has noticed the VHI website. I draw his attention to it and ask him to take the matter up with the VHI. The website is a part of the VHI's information service to patients in the "advise yourself" era now evident in dealing with health matters. I do not know how long the website has been in operation but it has only come to my attention recently. I do not know if the matter I am about to raise is new to the site.
There are recommendations on the site which are quite outrageous in relation to fluoride use during pregnancy. My concern, which I raised on the Adjournment last night, is with the recommendations of the Food Safety Authority on its feeding guidelines of 1999 on the use of fluoridated water, that is, tap water which most parents of babies would use in a mixing formula. The Minister has established a forum on fluoridation on which I commend him. He should ensure those who criticise the forum as a pro-fluoride forum do not turn out to be correct. I have concerns on that matter. I respect individual professionalism, but there is a view that this will turn out to be a pro-fluoride forum.
An Irish health insurer has a website lauding the use of fluoride. I will be more specific on this matter. The website asks the following questions: "Why do I need fluoride? How much do I need? Should I take a supplement? What are the best food sources?." It goes on to state:
Fluoride is a trace mineral best known as a dental cavity fighter. It also helps to form strong bones by bonding calcium and phosphorus. Your baby needs fluoride when the teeth begin to form at 10 weeks; later, in the second and third trimesters, fluoride is needed to develop primary incisors, molars, and permanent teeth.
On how much is needed, the website recommends that about 1.5 to four millogrammes daily is considered safe for adults. However, at the very best, the scientific jury is out on this matter. Some 95% of the countries of Europe, not just the European Union, have abandoned fluoridation of public water supplies, which has been used as a form of mass medication to prevent dental cavities. The correct use of the precautionary principle, which is often abused or used when people are uncomfortable or ignorant, is political or governmental interference in the scientific world, or political risk management of scientific research.
The Minister should ensure such advice is not supplied by health insurers because it will confuse people. Such advice will also prove incorrect because the forum on fluoridation will not come up with an answer. Will the Minister immediately investigate the VHI website and the advice it provides on fluoride, which I consider to be outrageous, particularly in the light of the uncertain state of the views of members of the international scientific community on this matter?
The Minister's colleague, the Minister of State at the Department of Health and Children, Deputy Moffatt, replied to the matter I raised on the Adjournment last evening. The Minister of State is a doctor and I have a qualification as a biochemist although it has been some time since I obtained it. However, the knowledge I amassed while studying means I understand the literature and can follow the debate. In that context and in respect of this particular issue, I disagree with the Food Safety Authority's view on infant feeding. I do not want any insurance company, albeit it dressed up as a service to patients using their websites, to give advice which will eventually be contradicted. It is only a matter of time before this happens.
It is extremely dangerous that pregnant women and the mothers of infants up to two years of age should be steered in the wrong direction. They would be better doing without any supplemental fluoride until we obtain the scientific facts. That is the advice of the British Medical Association and the authorities in Canada, America, Japan, New Zealand and Finland. As the facts have been provided by the international scientific community, why is Ireland out of step in terms of the advice it provides mothers in respect of the use of infant formula?
I draw the Minister's attention to this matter and thank the Leas-Chathaoirleach for granting me the latitude to raise it. I am extremely concerned about the information that has appeared on the VHI website and believe the Minister should take steps to have this changed, at least until the forum on fluoridation makes its report.
An Leas-Chathaoirleach: Perhaps the Minister will reply first to the debate on amendments Nos. 2 and 3. I allowed Senator Doyle some latitude in respect of the matter she raised, but perhaps we should dispose of the amendment before dealing with her concerns.
Mr. Martin: As already stated, we do not propose to accept amendment No. 2 because it seeks to delete from the Bill terms which prohibit cash plans from paying benefits directly to health service providers. The requirement is intended to ensure a clear distinction is maintained between cash products and indemnity products. In the interests of clarity for consumers I want to minimise the possibility of a situation recurring where a question could arise concerning the establishment of a Lego effect between risk-rated cash and community-rated indemnity plans. We dealt with this matter in the Lower House where I did not accept a similar amendment. However, I did accept an amendment similar to amendment No. 3.
With regard to the points raised by Senator Doyle, I have not seen the VHI website or the advice to which she refers. However, I will refer the matter to my Department's chief medical officer for his consideration.
Mrs. A. Doyle: I thank the Minister.
Mr. Martin: That said, however, we established the forum on fluoridation to engage in a detailed and calm debate on the issue of putting fluoride into the public water supply. The medical advice I have received from the World Health Organisation and other bodies suggests that there is no definitive research to show that fluoridation of water supplies causes harm to people. I am obliged to pay heed to such advice. When we established the forum on fluoridation we invited organisations opposed to putting fluoride into public water supplies to take part but, regrettably, they declined to do so.
Mrs. A. Doyle: They are concerned about the Constitution and the bias within it.
Mr. Martin: By refusing to take part, they reinforced it.
Mrs. A. Doyle: That is a reasonable point.
Mr. Martin: I attended a meeting of the forum which was addressed by professionals from the United States who are vehemently opposed to the fluoridation of public water supplies. This shows that the forum has been open to taking account of different perspectives and viewpoints on this issue.
There appears to be no argument about the demonstrable and significant impact on oral health in this country since the introduction of the mandatory fluoridation of public water supplies.
Mrs. A. Doyle: Ireland is only sixth in Europe in terms of oral health and four countries on the Continent which do not fluoridate their water supplies-----
Mr. Martin: European countries fluoridate their water supplies in different ways.
Mrs. A. Doyle: It is in toothpaste only, and that is a choice.
Mr. Martin: Many of the cities in the United Kingdom are moving towards fluoridation of public water supplies, as are some of the states in America. We are by no means the only country involved in the fluoridation of public water supplies.
As regards toothpaste and such matters, other factors are involved, such as the extraordinary dependence of children in Ireland on confectionery. In a recent survey we rank second highest, with Scotland, in terms of consumption of confectionery in OECD countries. What was also alarming in one of those lifestyle surveys was that many young boys would not brush their teeth even once a day. I was surprised by the high percentage who would not. All this will have to be taken into account.
We have changed as a society since the introduction of the fluoridation of public water supplies.
Mrs. A. Doyle: That is a fair point.
Mr. Martin: We have changed a great deal and those changes must be taken into account. I look forward to the recommendations of the forum.
Mrs. A. Doyle: The precautionary principle is all I ask the Minister to use. There is nothing to stop him from removing the 2,000 gallons of fluoride we pump into our drinking water every day until the forum reports. He can always reintroduce fluoride at a later stage.
Mr. Martin: There is much to prevent that happening. Any Minister would want to be reasonably satisfied about the medical evidence before fluoride would be removed.
Amendment, by leave, withdrawn.
Amendment No. 3 not moved.
Section 2 agreed to.
SECTION 3.
Mrs. Jackman: I move amendment No. 4:
In page 5, between lines 17 and 18 to insert the following paragraph:
"(c) the substitution of the following definition for the definition of 'health benefits undertaking':
"'health benefits undertaking" means a person (including a body established under the laws of a place outside the State) carrying on health insurance business in the State;',".
I would like to hear the Minister's response to this amendment.
Mr. Martin: The amendment concerns the addition of the words "in the State" to the existing definition of a health benefits undertaking contained in the principal Act. The definition contained in the 1994 Act reads as in the amendment but does not include the words "in the State".
It is not considered necessary to include these words in the definition for the following reasons. Health insurance business is defined in the 1994 Act as meaning the business of effecting health insurance contracts. We must, therefore, look to the 1994 Act's definition of health insurance contracts. Such contracts are defined as being contracts of insurance or any other insurance arrangement which provides for the making of payment specifically for the discharge or reimbursement of charges in respect of the provision of hospital in-patient services or ancillary health services.
The Act further specifies that hospital in-patient services and out-patient services have the meaning accorded to them in the Health Act, 1970, that is, services of such kind to be provided within the functional area of a health board. Therefore, health insurance contracts relate to health services to be provided for persons within the State by definition and by reference to the 1994 Act.
The provisions of the Bill cannot in any way impinge upon the right of insurers authorised to conduct the relevant class of business covering sickness insurance in another EU member state to engage in the provision of such services into Ireland on a service basis. Under EU directives, an insurer is not obliged to establish an office or branch in another member state as a condition of engaging in business there.
The Department previously received legal opinion on other matters which touched materially on this subject and it stated that the term "health insurance contract" does not cover the provision of hospital in-patient services or ancillary health services where those services are constructed to be provided for someone outside the State and, save in limited circumstances, would be provided outside the State. For all these reasons it is unnecessary to include the phraseology in the amendment.
Mrs. Jackman: I respect the legal opinion the Minister has received and hope it is 100%. The thrust of the amendment was to make it clear the State was not seeking to impose control extraterritorially on health insurance business conducted from outside the State. The Minister stated definitely from the advice he received that the provisions of the Bill would not impinge on the right of insurers authorised to conduct the relevant class of business covering sickness insurance in another EU country to engage in the provision of such services in Ireland. He has checked that out and his legal opinion states there is no difficulty or risk inherent in this.
Mr. Martin: No. There is, therefore, no need for the amendment.
Mrs. Jackman: In the context of the legal advice, I will not press the amendment.
Amendment, by leave, withdrawn.
An Leas-Chathaoirleach: Amendments Nos. 5, 10, 11, 14, 16, 19 and 20 are related and may be discussed together.
Mrs. Jackman: I move amendment No. 5:
In page 5, between lines 29 and 30, to insert the following paragraph:
"(e) the insertion of the following definition after the definition of 'the Registrar':
"'relevant risk" shall be construed in accordance with section 12(10)(a);',".
These amendments were tabled on Committee Stage in the other House. Risk equalisation has been the most controversial aspect in the issue of health insurance. I would like the Minister to assure me and members of the Fine Gael Party that there is no need for this amendment. I would like a lengthy response from him on risk equalisation.
Mr. Martin: That is fair enough. As these amendments touch on the crucial area of risk equalisation and how it will operate and because of the importance I attach to risk equalisation as an integral part of an effective regulatory framework supporting community rating and open enrolment, I will take the opportunity, as the Senator asked, to outline the general considerations governing policy in this area.
Before the introduction of the principal Act in 1994, it had been indicated by successive Ministers that risk equalisation would be a central feature of our health insurance industry and regulatory framework. It is also important to bear in mind that risk equalisation measures are permitted under the European Union's third non-life insurance directive.
Our private health insurance system operates under the principle that insurers must accept all comers irrespective of age or health status and charge them a standard premium for a given level of cover. In other words, insurers cannot be selective about the risks they will cover or the price they will charge. This also means there is solidarity between the young and the old and the healthy and the sick. People do not have to buy health insurance and their trust and confidence in the long-term stability of the system are vital if this solidarity is to be maintained.
This is fine as long as all insurers' risk profiles are broadly similar. There is a serious danger, however, that the market could be destabilised if significant variations in risk profiles emerge. For example, if some insurers, by accident or design, end up with a younger, healthier population, they will be able to charge lower premiums. The other side of the coin is that premiums will inevitably rise for those insurers left with a higher proportion of less healthy and older individuals.
It can be argued in this scenario that the market risk equilibrium would be corrected by the people switching from the higher charging insurers to those with lower premium rates. This is fine in theory but, in practice, the people most likely to switch in this way are those at the lower end of the risk spectrum. This would have the direct effect of pushing up rates even more for the less fortunate insurers, ending up in what could easily become a self-destructive rates spiral with the risk that one or more of the affected insurers would collapse. This would seriously undermine public trust and confidence in the stability of the system which is vital in a voluntary, community rated environment such as ours.
Risk equalisation can ensure this type of potential destabilisation does not occur. It aims to equalise differences in health insurers' costs that arise due to significant variations in their risk profiles. It can thereby ensure no section of the insured population is placed at a disadvantage due to the emergence of differences in risk profiles. In our health insurance system, the equalisation of differences in risk profiles is not unreasonable given that insurers cannot be selective about the risks they will cover or the price they will charge. Risk equalisation levels the playing pitch in an area where insurers should not compete in the first place. They can still gain competitive advantage in many other areas, such as customer services, provider relations, product innovation, claims management, purchasing and administrative efficiencies.
Many have said this is a theoretical risk, but we can point to certain experiences internationally which bear out our view that risk equalisation is central to the regulatory framework. Until the beginning of the 1970s, the Dutch private health insurance market was dominated by community rating without risk equalisation. During the 1970s and 1980s the market equilibrium was unravelled by risk selection and premium differentiation. Several private health insurers were caught in a deadly spiral of a worsening risk pool and increasing premiums.
The experience of instability in the Dutch system during the 1970s and 1980s has a parallel in a current difficulty in the German sickness fund. BKK Stadt Hamburg has recently run into serious financial difficulties and has an accumulated deficit of DM100 million. The two primary reasons for this are the relatively high cost of health care in the Hamburg region and the fact that the fund has experienced a disimproving claims ratio due to the loss of younger healthier clients, for which it was not adequately compensated by the existing German risk equalisation system. The resulting increase in premiums has meant it has lost even more younger healthier clients, further exacerbating its difficulties. The German Government commissioned an expert group to review the German risk equalisation system. The group, which reported in February 2001, recommended that the existing risk equalisation system be strengthened.
On the amendments before us, the purpose and intended impact of introducing the term "relevant risk" suggests somehow breaking down the composition of the community rated market for unclear ends. The intended replacement of the term "insured risks" throughout section 9 is very unsatisfactory from my perspective. The definition refers us to section 12(10)(a), but when we get there all we find is that it involves a reference to risks of such class or nature as may be prescribed. This does not take the Legislature very far in terms of knowing what it is actually providing for, nor does it provide much to go on as regards the formulation of regulations pursuant to the Legislature's wishes.
The definition provides the basis for a number of other amendments under section 9 which seek to remove a reference to the risks as represented by the entire insured population who have traditionally contributed to and in their time enjoyed the benefits of intergenerational solidarity through community rating and to replace it with a more selective but unspecified concept of relevant risks. Such an approach does not appear to support the application of community rating across the insured community as a whole and would not, therefore, serve the interests of the common good. That is the basis on which the amendments were rejected in the other House and I am bound to reject them here also.
There is a commitment elsewhere in the Bill which ensures that any regulations that may flow from this Bill, particularly regulations that may flow in relation to risk equalisation, must be brought back to both Houses for debate and approval. In the normal course of events, regulations are laid before the House but they do not have to be debated. They can only be raised by Members through a motion to annul the regulations. Because of the complexity of the situation and the very significant interest among Members of the House, the general public and the various insurance companies, a provision is included in the Bill which ensures the regulations setting up the scheme of risk equalisation to be introduced will come before the House. I will deal later with the scheme itself in the course of the debate on the amendments.
Dr. Henry: I congratulate the Minister on sticking to the opinion that risk equalisation must be included because, without community solidarity internationally, health services will run into far too much trouble. He pointed out the European experience but the American experience has been even worse over decades when they did not have risk equalisation. My amendments later propose to extend risk equalisation to the genetic level.
Mrs. Jackman: The later amendments propose that the regulations be laid before both Houses of the Oireachtas. The general public find the terms "risk equalisation" and "community rating" difficult to understand, as I did when reading the discussions on the issue in the other House and listening to contributions from both health insurance companies. It is very important that the regulations in this regard are brought to both Houses of the Oireachtas.
The rationale behind the amendments is to make any reserve power or risk equalisation scheme proportionate. I am aware the Minister debated this issue at length with Deputy Gay Mitchell on Committee and Report Stages. This is the kernel of the Bill and I accept the Minister's clarification on the issue. However, there are varying shades of opinion and different interpretations in regard to the Dutch experience. I will withdraw the amendments while stressing the importance of bringing the regulations before both Houses of the Oireachtas.
Mr. Martin: We have moved a long way since the White Paper and the 1994 Act. I have had extensive consultations with both insurance companies in this country and my Department had discussions with the broad insurance industry in the preparation of this legislation. On the introduction of risk equalisation, we are absolutely committed to protecting the stability of the market, in the first instance, and the concept of community rating and open enrolment. We see risk equalisation as essential to achieve that.
Under this Bill, we will establish the health insurance authority. I have established the authority on an interim basis under the 1994 Act. We have given significant discretion to the health insurance authority vis-à-vis the actual commencement or triggering of risk equalisation. Some of the amendments would have the effect of waiting for a doomsday situation to arrive when either the health insurance authority or the Minister of the day would have to intervene. My experience is that that would be too late because if one waited for the system to be almost teetering on the brink of collapse, confidence would be lost and the system would be irreparably damaged and very difficult to retrieve.
We received significant actuarial advice, including independent advice, on this issue. Our approach is both balanced and flexible. Both of the main players would be critical of our approach on different sides of the spectrum. Some believe we are being too restrictive, while others believe we are being too liberal. There are already suggestions in regard to the mechanisms and trigger points for the introduction of this provision, which suggests we are getting the balance right. However, the provision needs to be refined further and there is some work to be done prior to bringing in the regulations which will establish the scheme of risk equalisation. An objective of the Bill is to facilitate competition while at all times retaining stability within the marketplace.
Amendment, by leave, withdrawn.
Section 3 agreed to.
NEW SECTION.
Mrs. Jackman: I move amendment No. 6:
In page 6, before section 4, to insert the following new section:
4.--- Section 2 of the Voluntary Health Insurance (Amendment) Act, 1996, is hereby amended in subsection (1) by the insertion after 'as it may think fit' of 'and may provide such other services, including services to persons outside the State, as it may think fit',".
Mr. Martin: Amendment No. 6 arises from the inclusion of an amendment under the Bill to extend the powers of the VHI in regard to the products and services it is empowered to provide. I tabled an amendment to address this issue on Committee Stage in the other House, which was accepted. This now stands as section 14 of the Bill, which should be sufficient to meet the needs of the board pending legislation specifically to address the nature of its corporate status.
The amendment would give the VHI undefined powers in regard to the services it could provide. It would represent a departure from the existing legislative structure which requires the approval of the Minister of the day to propose schemes of health insurance. It would literally give the VHI the power to provide any service it saw fit. However, under its existing status, the VHI is not an authorised insurer for the purpose of carrying on either life or non-life insurance business in accordance with the prudential and other requirements of the Department of Enterprise, Trade and Employment. It is considered that the proposed amendment would conflict with the existing legislative framework which requires the approval of the Minister of the day for new schemes and VHI's exemption from meeting the normal requirements for authorisation as an insurer. It is considered appropriate, therefore, that any new scheme should be subject to the approval of the Minister and, where necessary, any regulatory conditions he or she may deem appropriate.
There are issues that fall to be determined in subsequent legislation or in consideration of the overall corporate status of the VHI. We have employed consultants to advise us on the future corporate status of the VHI. In the meantime, because of the regulatory framework within which the VHI works which emanates from the Department of Enterprise, Trade and Employment, it would not be possible to give a broad base for the approach as the amendment would suggest. We have gone a long way and we did accept an amendment giving additional powers and authority to the VHI to pursue a range of services. It was relatively satisfied with that and that represents significant progress.
Amendment, by leave, withdrawn.
SECTION 4.
Mrs. Jackman: I move amendment No. 7:
In page 6, between lines 18 and 19, to insert the following:
"(3) Subsection (1) does not apply to any arrangement entered into by an employer whereby the employer agrees to discharge the whole or part of any fees or charges which have been or may be incurred by an employee, or any dependant of the employee, who is a party to or named in a health insurance contract (effected with a health insurance business other than the employer) in respect of health services received by the employee, or his or her dependant, which are not payable by the insurer under that health insurance contract.".
This amendment was addressed specifically in the other House and I would like a comment from the Minister in relation to it.
Mr. Martin: The section provides that arrangements whereby employers meet or guarantee to meet the hospital in-patient costs of their employees are deemed to constitute a health insurance contract. As currently drafted it provides that an employer who agrees to reimburse or discharge the fees or charges incurred by employees or any dependant of an employee in respect of hospital in-patient services will be deemed to be carrying on a health insurance business and will be subject to the amended legislation.
Any opportunity for significant health insurance of this kind on the part of employers will have the effect of damaging community rating by removing a predominantly young and healthy population from the general risk pool. Clearly such a development, which is common practice among larger employers in the United States, would threaten the solidarity between generations which again underpins community rating. Providing scope for the development of risk related gap insurance product for insurers would have a similar effect. The very specific reason for this provision is to support the financial integrity of community rating as it operates in our system.
The development of self insurance practices on the part of employers, if it becomes widespread, would damage the system by removing or diminishing the contribution which employer paid schemes provide to the system. Corporate or employer paid business represents about 20% of the market in terms of total premiums paid and is growing quite significantly. Amendment No. 7 appears to suggest that this positive contribution to the overall risk pool represented by the entire population is not fully needed. Such a development would impact on the cost of insurance generally for those who are not paid for by their employer.
The amendment, if accepted, would provide an opportunity for insurers to segment the employer paid portion of the market by offering the minimum level of cover permitted under the regulatory system on a community rated basis and cover for anything above that on a risk rated basis. I do not see the opening of the door to such practices as enhancing the strength of community rating. I have made the necessary provision in the Bill to facilitate existing practices in the employer paid sector of the market relating to payment of excesses which was recently brought to the attention of the Department. We put a limit on that which was accepted as an amendment in the other House.
Amendment, by leave, withdrawn.
Section 4 agreed to.
SECTION 5.
Dr. Henry: I move amendment No. 8:
In page 7, line 25, after "sex" to insert "genetic profile".
I thank the Minister for taking some of my amendments on the Mental Health Bill and I thank Senator Jackman for bringing them through the House yesterday. The Minister of State, Deputy Moffatt deserved some good luck after the time he had with me last week.
The reason I was not here relates directly to this amendment. I was at a meeting in Brussels of the temporary committee on human genetics involving members of the national parliaments of the member states and the applicant countries. Part of this meeting was specifically on the use of genetic information and data protection. It relates exactly to this amendment.
My colleagues in clinical genetics, as well as many other people, are extremely concerned about the fact that genetic information could be used by insurance companies. Virtually all the European countries now have legislation, or are in the process of bringing through legislation, banning the use of genetic information in the calculation of insurance policy premiums. It is about time we began to do this here. There are several reasons it is important.
Genetics is a very new science and as yet we have very little qualitative assurance in the field. As a result we could have test results from unreliable laboratories and we could have great difficulty with interpretations of these tests by those in the insurance business. For example, there was a considerable amount of trouble in America recently, where they use genetic testing in some insurance companies, owing to the fact that people who had sickle cell trait but not the disease were being classed as having the disease and their policies loaded accordingly.
There is also the problem that the genetic profile of a person involves the interdependence of genes. We really know very little yet concerning how these genes interrelate and how they work physiologically. We do not want to get ourselves into a situation where people, who should be advised to take a test to see if they have a particular gene, refuse to take the test because of the implications it might have for their health in the future.
We do know that environmental factors and one's genetic complement also interplay. There may be an important personal reason for a patient to know what their genetic profile is, but naturally they do not want to take a test, although it may be to their advantage, if they feel an insurance company will treat them in an adverse manner because of having taken it. This is a little like the position some years ago people were asked by insurance companies if they had taken a test to see if they had HIV. These are delicate areas and we need to be careful.
Once one person in a family takes a genetic test it has an effect on the whole family. Parents, siblings and children of that person will have to consider whether they too have whatever faulty gene is considered to be the problem. We are getting into an area of predictive medicine on this. There is a lot of work to be done in the whole area before we should agree that genetic profiles are important considerations.
At the meeting in Brussels it was considered extremely important that a moratorium be put over this area so that the science can develop properly and we can enjoy the benefits of genetics rather than having people shy away from them. That is what my amendment is about. People should feel it is quite all right to get a genetic test if they want. It should not interfere with risk equalisation. I hope the Minister will accept this amendment. We must start somewhere on the issue of genetic testing and insurance and it might as well be here.
Mr. Martin: I thank Senator Henry for introducing this amendment and thereby introducing the general issue of genetic testing. I thank her also for her comments on the Bill that went through the House yesterday. The Minister of State, Deputy Moffat, and I were in a position to bring forward some amendments following the Senator's robust performance on the previous occasion. We reflected on that and were in a position to accept some of her amendments. Senators Jackman, Lydon and others on the Government side of the House made their views known to me also in terms of the desirability of accommodating some of the amendments and I was glad to be in a position to facilitate them.
I accept the Senator's concerns in relation to the use of a person's genetic profile by insurers in setting premiums for insurance cover, particularly given recent publicity which other areas of the insurance industry have attracted. I reassure the Senator that the amendment proposed is fully provided for under the existing text of the relevant section which was drafted under the instruction to preclude health insurers from using any forms of predictive diagnosis of health problems as a basis for varying premium levels. The import of the Senator's amendment is therefore already catered for in the provisions of the principal Act as repeated in the Bill.
12 o'clock
The existing section specifically provides, by the inclusion of the phrase "the suffering or prospective suffering of a person", that genetic factors cannot be taken into account. This is in addition to the general provision in section 5(2) that states that its provisions apply "without prejudice to the generality of subsection (1)". The latter subsection generally obliges insurers to charge the same premium in all circumstances for contracts and prohibits them from offering contracts that are not community rated.
Senators may be interested in a Government memorandum written during the drafting of the Health Insurance Act, 1994, which formed the basis of instructions to the parliamentary draftsman preparing the Bill. The important issue of fully preserving the principle of community rating, notwithstanding envisaged developments in genetics, was addressed in the memorandum. It was pointed out that genetic data might be used to predict the likelihood of disease-causing genetic variants in the population. At the time, genetic developments were becoming increasingly accurate, permitting insurance companies to take account of disorders not apparent when applications for insurance were made. This gave rise to concern that insurance companies may use genetic data to seek to reduce exposure to risk and consequently refuse insurance cover to those whose genetic disposition makes them likely to suffer from a serious condition in the future.
The European Union did not have a policy in this area in 1994. While a number of countries were considering their options, there was no common approach among member states to genetic testing and screening for insurance purposes. The 1994 memorandum advised that the general policy to be adopted regarding the use of results from genetic testing and screening should firstly be determined in relation to life assurance. It was considered prudent to copper-fasten the position in relation to health insurance by precluding insurers from using predictive diagnosis of health problems as a basis for varying premium levels. The memorandum to Government shows that those drafting the Health Insurance Act, 1994, had particular foresight in relation to genetics and other developments that might have enabled predictive diagnosis and thereby affected premium levels. The preclusion of such practice in the 1994 Act is repeated in this Bill.
Section 7 of the 1994 Act was prepared by the parliamentary draftsman as a result of the requirement outlined in the memorandum. This Bill retains the safeguards included in the 1994 Act, including the general prohibition of non-community rated contracts, which is important, and the specific prohibition in section 2 relating to prospective suffering. I am satisfied that these safeguards satisfy the intentions of the amendment proposed by Senator Henry.
Dr. Henry: We have come a long way since 1994. While we should not blindly follow other countries, many of them consider it significant that genetic testing be mentioned. Why bother mentioning age, sex and sexual orientation if everything is blanketly covered by the mention of community risk? This is an important amendment. Ireland is to the fore regarding biotechnology, but we are making no attempt to apply European conventions.
Mr. Martin: We are ahead of Europe on this matter. The memorandum to which I referred was written seven years ago and we should acknowledge the foresight of those who wrote it. I accept that the field of genetics was not as advanced in 1994, but much research was being conducted at the time. This Bill precludes any form of predictive diagnosis and thereby provides for future developments that may come on stream. Insurers would be in breach of primary legislation were they to attempt to preclude someone from an insurance contract on the basis of genetic testing, they would be breaking the law.
Dr. Henry: I understand the Minister's point, but I am not sure I agree we are far ahead as British legislation in this area was produced in 1990 and 1995. Why mention age, sex and sexual orientation in the Bill if everything is covered? We need to include the words "genetic profile" or "genetic information" in legislation, as it is an important area. If genetic profiling has become commonplace in ten years time and everyone has accepted its use in these matters, we will not worry. This amendment is very important to the insurance industry, as is this Bill. There has already been trouble in America. While the VHI is an Irish company, most companies dealing with life insurance operating here are British. A voluntary code of practice for insurance companies is used in the United Kingdom and I suppose it will apply here too, although I would like statutory legislation.
Mr. Martin: This Bill represents the statutory legislation sought by the Senator, as it prohibits the utilisation of genetic testing.
Dr. Henry: Is there a provision for future suffering?
Mr. Martin: Yes, section 8 states that "a registered undertaking, other than a restricted membership undertaking, shall not refuse to effect a health insurance contract with or for a person of whatever age or such a person and his or her dependants except in such cases (if any) or in such circumstances (if any) as may be prescribed". A contract cannot, therefore, be refused. The other amendment to which I alluded relates to the phraseology of predictive diagnosis or any suffering from which people may suffer in the future. People might develop chronic conditions later in life and we want them to be covered.
Dr. Henry: I would like the words "genetic profile" to be included in this section. The Minister is a reasonable man and I am sure he believes genetic testing is provided for. Many of those working in this area are very anxious about this matter.
Mrs. Jackman: Yes.
Dr. Henry: Why mention other variables like age, but not genetic testing, if they have been provided for? It would be a good idea to include the words "genetic profile".
Mr. Martin: This has become a matter of semantics. I referred to the memorandum that led to the 1994 Act and it can clearly be seen that section 7 of that Act was specifically prepared by the parliamentary draftsman to accommodate concerns regarding genetic testing. The language used in the 1994 Act, as opposed to the words preferred by Senator Henry, was deliberately chosen to cover all eventualities in this and other fields that may lead to a person being denied health insurance because of predictive diagnosis. The decision made in 1994 should be acknowledged as the language used undoubtedly covers genetic testing.
Dr. Henry: It was good of the Minister to refer to the memorandum as I would not have known about the thinking behind the provisions of the 1994 Act otherwise. Nevertheless, I would like the words "genetic profile" to be included in the Bill, which is a problem for the Minister.
Mr. Martin: It is.
Dr. Henry: I seek the amendment in order that those who will take genetic tests can be reassured. We had terrible trouble when people were asked if they had taken a HIV test.
Mr. Martin: That is all covered now.
Dr. Henry: It is not. Does the Minister remember the ridiculous carry-on that lasted for many years?
Mr. Martin: I remember.
Amendment put.
The Committee divided: Tá, 16; Níl, 26.
Tá
Burke, Paddy.
Caffrey, Ernie.
Coghlan, Paul.
Coogan, Fintan.
Cosgrave, Liam T.
Costello, Joe.
Cregan, Denis (Dino).
Doyle, Joe.
Henry, Mary.
Jackman, Mary.
McDonagh, Jarlath.
Manning, Maurice.
Norris, David.
O'Dowd, Fergus.
Ross, Shane.
Taylor-Quinn, Madeleine.
Níl
Bohan, Eddie.
Bonner, Enda.
Callanan, Peter.
Cassidy, Donie.
Chambers, Frank.
Cregan, John
Dardis, John.
Farrell, Willie.
Finneran, Michael.
Fitzgerald, Liam.
Fitzgerald, Tom.
Fitzpatrick, Dermot.
Gibbons, Jim.
Glennon, Jim.
Glynn, Camillus.
Kett, Tony.
Kiely, Rory.
Lanigan, Mick.
Leonard, Ann.
Lydon, Don.
Moylan, Pat.
O'Brien, Francis.
O'Donovan, Denis.
Ó Fearghail, Seán.
Ormonde, Ann.
Quill, Máirín.
Tellers: Tá, Senators Henry and Jackman; Níl, Senators T. Fitzgerald and Gibbons.
Amendment declared lost.
Section 5 agreed to.
Sections 6 to 8, inclusive, agreed to.
SECTION 9.
An Leas-Chathaoirleach: Amendments Nos. 15, 17 and 18 are related to amendment No. 9. Amendments Nos. 9, 15, 17 and 18 may be discussed together.
Mrs. Jackman: I move amendment No. 9:
In page 13, to delete lines 36 to 49 and substitute the following:
"(i) the making of payments by registered undertakings to the Authority of such amounts as may be determined by the Authority in such manner and by reference to such matters as may by regulations be prescribed,
(ii) the making of payments by the Authority of such amounts as may be determined by the Authority to such registered undertakings as may be so determined in such manner and by reference to such matters as may by regulations be prescribed,
in the event that such conditions as are specified in the scheme relating to the nature and distribution of insured risks among the undertakings and any of the conditions in paragraph (d) are fulfilled.".
I ask the Minister to take the points raised in the amendment into consideration when he drafts his regulations. I hope they will be discussed in greater length when the regulations are laid before the House. I ask him for an assurance that those points can be accommodated in the regulations.
Mr. Martin: The amendments touch on the conditions under which risk equalisation will commence. It may be useful to the House if I outline my thoughts and proposals in this area. In the beginning the health insurance authority will carry out risk equalisation calculations on a notional basis. It is not intended to resort to actual financial transfers between insurers under risk equalisation unless there is a material level of distortion in the risk profiles of competing insurers which would threaten the operation of genuine community rating across the system.
As regards the wide parameters to be set in regulations, it would first be a matter for the health insurance authority to decide when the degree of difference, as measured by the level of notional transfers, was such as to warrant the commencement of risk equalisation, having had regard to all other relevant considerations. We will set forward in the regulations parameters which will be extensive and on the basis of tests being applied in certain instances. The specific test to be applied in this instance will be whether potential payments under the system remain below a lower trigger point - we are looking at approximately 2%. Anything over that is the lower trigger point the health insurance authority would look at. If the potential payments lie between the lower trigger point and an upper trigger point, the payments on the risk equalisation will only commence if the authority makes a recommendation to that effect and that recommendation is accepted by the Minister of the day.
As regards potential payments under the system exceeding the upper trigger point, we suggest that approximately 10% is the upper trigger point, but that is subject to further discussions and reflections on submissions made on that approach. The 10% was included not to say to the health insurance authority it can only act then, but to say that if it does not act by that stage it is time for the Minister to get involved. If potential payments exceed the upper trigger point, risk equalisation will commence unless it appears to the Minister of the day, having consulted with the authority on the matter, that there are not any good reasons for doing so. They are the types of issues reflected in the risk equalisation scheme which will be part of the formal regulations and which must come back to this House, as I have already outlined.
It is open to the health insurance authority to take into account whatever factors it considers relevant in exercising its crucial discretions in relation to the regulation of health insurance business in the overall best interests of the consumers of health insurance. However, its consideration of the process must include regard for the stability of community rating and the facilitation of competition. We have included that as the broad principles of stability of community rating and the facilitation of competition. The approach outlined would position risk equalisation as a genuine reserve power to be put into effect in circumstances where an independent body, the health insurance authority, determines that material distortion in the risk profiles of competing insurers represents a threat to the stability and maintenance of community rating. It further provides that it will be fair and proportionate as regards commencement and application.
The amendments before us are far-reaching and ones we have opposed in the other House because they seek to severely limit the ability to have recourse to the use of risk equalisation as a necessary protection for community rating. They also seek to ensure that if ever risk equalisation is brought into effect, it will be so limited in its impact as to be of no avail to correct what would, by then, constitute major and established distortion in the community-rated market. They fail to recognise that risk equalisation is an instrument of stability, not some panic measure. To return to my earlier point, there is no point in commencing risk equalisation when the system is collapsing. It is too late, and the amendments before us suggest that kind of belated intervention into the market when, to all intents and purposes, stability has collapsed.
Risk equalisation has to be an instrument of protection, a pre-emptive strike against the collapse of the market. There have been arguments as to whether our scheme is enough of a pre-emptive mechanism to prevent the collapse of the market, and representations have been received from one insurer on that basis. The other insurer is arguing it is too restrictive and punitive. I do not accept that because we are committed to the person who is insured. That is our number one priority - the person who is taking out the insurance - and the solidarity between generations and community rating. That is the reason we are concerned about these amendments and are not in a position to accept them. No doubt we will have an opportunity to debate this issue again when it comes back to the House in the autumn.
Mrs. Jackman: While I accept what the Minister said about the protection aspect of risk equalisation, the other side of the coin, which he referred to, is facilitating competition. That has been the controversial thrust of the Bill throughout. On the two amendments, we have to be fair to both sides. The Minister said the amendments suggest that risk equalisation only comes into the picture at a time when there is a little instability.
Mr. Martin: Not a little.
Mrs. Jackman: That is more or less what the Minister said. We have to be fair in terms of opening up competition, and that is what the Minister heard too from both sides of the debate.
The Minister said that when the regulations are laid before the House, which he expects to be around October-----
Mr. Martin: There is a statutory obligation, arising from the passing of the Bill, that the regulations on risk equalisation will have to come back here. We have to bring them back to both Houses of the Oireachtas for affirmation.
Mrs. Jackman: Yes.
Mr. Martin: In other words, there has to be a positive vote in favour of the risk equalisation scheme as proposed in the regulations. Therefore, we have to come back to the House.
Mrs. Jackman: I understand that, and that is extremely important because it is knit into many of the amendments that there would be a period for discussion when the regulations come back to the House and that they have to be approved by both Houses of the Oireachtas, but will there be a little more leeway in relation to the points made in this amendment?
Mr. Martin: I shared my thoughts with the Senator in terms of the proposals we were looking at, including the lower trigger point, the upper trigger point-----
Mrs. Jackman: I understand that.
Mr. Martin: -----and the health insurance authority having discretion. The health insurance authority will have to get in the data. We do not yet have complete data from the insurance companies so we are not in a position to assess whether there is a distortion in the risk profiles of the competing insurers that would threaten the stability of the market. That is the job of the health insurance authority. It has to examine the stability of the market, facilitate competition and then take decisions in the general interest of consumers. Those are the broad principles within which it operates. The regulations would also provide a specific framework within which it would operate in terms of the actual triggering of the mechanism, but in the framework we propose we are allowing sufficient flexibility.
The health insurance authority will take in its data and will have certain flexibilities between percentage points as to when it actually triggers the mechanism, so it is far less restrictive than it was previously. We have come a long way in terms of refining the framework within which risk equalisation will operate, but our priority throughout all of this is communityrating and stability in the marketplace. That is uppermost in our minds and I would be wary of creating a liberal, flexible regime that would be too wide and which would, in itself, contribute to instability in the marketplace. That is a serious concern because the community rating concept and solidarity between generations are important principles which those who have taken out health insurance for a long time would like to see supported and ring-fenced by any legislation we introduce.
Mrs. Jackman: I hope when the regulations are laid before the House, there will be further discussion because we-----
Mr. Martin: May I come in again because this might cover another amendment from the Senator-----
Mrs. Jackman: Yes, to reduce it.
Mr. Martin: -----we will deal with later relating to my decision to allow any new entrant into the marketplace a window for 36 months? The Senator tabled an amendment to reduce that period to 18 months, and we debated that in the other House. The purpose of extending the period to 36 months was to provide for competition. All Members of the House say they are in favour of competition and from our work and research - we are not infallible - the advice we have received and from talking to people who might be interested in coming in, they saw the window issue in terms of start-up, development costs and so on as a key factor in facilitating competition. Some people who might be interested in coming in did not see risk equalisation as a prohibitive factor in terms of participation in the market. It was articulated to us that they saw risk equalisation as a sensible, logical part of the process. Extending the window - risk equalisation does not kick in until three years after a new entrant comes into the marketplace - is probably a more significant factor to facilitate competition than anything we might do under risk equalisation.
Mrs. Jackman: There is another health insurer in the country. Regardless of whether the period is 18 or 36 months, is the Minister surprised there is not another competitor in the market at this stage or does he know of any competitors who are interested in offering health insurance?
Mr. Martin: We now have two companies in the market. We would prefer more and, having listened to the contributions made during the debate, the general desire of the House is that there would be more. There are soundings that certain parties might be interested in coming into the market. I will say no more than that at this stage. We have indications, but receiving indications and firm decisions are two different matters. We have to watch the space.
Mrs. Jackman: I will come to that again.
Acting Chairman (Mr. Finneran): Is amendment No. 9 being pressed?
Mrs. Jackman: It is withdrawn in the context of it being debated when the regulations are brought back to both Houses.
Amendment, by leave, withdrawn.
Amendments Nos. 10 and 11 not moved.
Acting Chairman: Amendment No. 12 is related to amendment No. 13 and they may be taken together, by agreement.
Mrs. Jackman: I move amendment No. 12:
In page 13, after line 49, to insert the following:
"(b) It shall be the duty of the Minister and the Authority to ensure that where any provision is made for the making of payments of the kind referred to in paragraph (a), the need for such payments to be made is kept under review and reported on annually to the Oireachtas.".
This is an important amendment which states that where any provision is made for the making of payments of the kind referred to in paragraph (a), the need for such payments to be made is kept under review and reported on annually to the Oireachtas. I understand the Minister acceded to that in the other House.
Mr. Martin: That the authority shall report annually to both Houses?
Mrs. Jackman: Yes.
Mr. Martin: Yes. We have provided for that. I refer the Senator to section 33 of the principal Act which requires the authority to submit an annual report to the Minister who shall lay it before each House of the Oireachtas. This will ensure that the Minister and the Oireachtas are advised of the authority's activities, excluding its functions, under the legislation.
It should also be noted that under section 32 of the principal Act, the authority's annual accounts must be submitted to the Comptroller and Auditor General for audit. The Act requires the Minister to lay the said annual accounts and the Comptroller and Auditor General's reports thereon before the Houses of the Oireachtas.
The provisions of the principal Act require the authority to operate to a high degree of accountability and transparency, as well as specifically ensuring the Oireachtas is kept informed of its activities. We have also provided elsewhere in the Bill that there will be an annual report on the operation of any risk equalisation mechanism. On Committee Stage in the Dáil I indicated that a specific amendment requesting the authority to report annually on risk equalisation would be brought forward. I introduced such an amendment.
Amendment, by leave, withdrawn.
Amendments Nos. 13 to 20, inclusive, not moved.
Section 9 agreed to.
SECTION 10.
Mrs. Jackman: I move amendment No. 21:
In page 17, line 31, to delete "36" and substitute "18".
We touched on the subject matter of this amendment a few moments ago. This amendment seeks to replace the 36 month period with an 18 month period. This issue was the subject of much discussion in the Dáil and the Minister has responded. I am surprised by the change as the White Paper proposed an 18 month timeframe for exemption from risk equalisation for new insurers and 36 months is a long time. Why has this change been made? The Minister attempted to explain the reason, but I would ask him to again outline the rationale behind the change in the timeframe.
Mr. Martin: The Senator asked if I am surprised that there is no competition in the marketplace. There are two players.
Mrs. Jackman: I asked the Minister if he was surprised there is not greater competition.
Mr. Martin: The existing situation was not doing the business in terms of facilitating competition. The White Paper proposed giving new entrants to the market the choice of an exemption from risk equalisation for a period of 18 months in recognition of the value which they can bring to consumers. Following the publication of the White Paper, departmental officials engaged in widespread consultations with interested parties and the broad insurance industry and it became apparent that the general view was that the proposed window was not considered to be of sufficient duration to be attractive to potential market entrants. In other words, the 18 month window was not doing the business in terms of promoting further competition. This answers the Senator's question regarding whether I was surprised that there is no further competition. It is very much down to the issue of competition. There was a view that this measure needed to be improved upon if we were to provide sufficient attractions for people to consider entering the market. This measure is aimed at facilitating further competition in the market.
There is a recognition that entering the market involves significant start-up costs. It must also be recognised that it takes time to build up a critical mass of numbers. Taking both issues into account, it is considered that the 36 month window is appropriate as it strikes a balance between entering and becoming established in the market, and protecting the principle of community rating.
The provision of a 36 month window is a key move in the direction of creating the opportunity for more competition. This is the reason we introduced this measure in the Bill and I refuse to accept amendments which would bring us back to the 18 month window.
Mrs. Jackman: I would not wish to see a prohibition on competition.
Mr. Martin: The measure in the Bill promotes competition.
Mrs. Jackman: I accept the Minister's point, but I am surprised that we only have two insurers. There may be other reasons for this.
Mr. Martin: There may be other reasons.
Mrs. Jackman: The Minister is not in a position to give the House any indication as to-----
Mr. Martin: I am giving the House the best advice available to us, following much consultation. We will give this measure a shot. The indications are that this issue is more significant than some of the Bill's provisions regarding risk equalisation. People are saying that there must be a generous entry period to allow insurers to become established in the market. The indications are that this issue is more significant than measures introduced regarding risk equalisation. Some companies which might be interested in entering the market have not identified risk equalisation as the key issue.
Mrs. Jackman: They are still not here.
Mr. Martin: The Bill is not passed. There is uncertainly regarding the legislative environment following the publication of the White Paper, the preparation of the legislation and so on. What most people are crying out for is certainty. This Bill will provide certainty in terms of the legislative framework. That is an important point for all players in order that they will know the kind of field on which they will play.
Amendment, by leave, withdrawn.
Section 10 agreed to.
Sections 11 and 12 agreed to.
NEW SECTIONS.
Mrs. Jackman: I move amendment No. 22:
In page 17, before section 13, to insert the following new section:
"13.---The Following section is inserted after section 21 of the Principal Act:
21A.---It shall be the duty of the Minister and the Authority to carry out their functions and exercise the powers conferred on them under this Act in a manner which--
(a) does not discriminate unfairly between registered undertakings,
(b) promotes competition in the provision of health insurance, and
(c) protects the interests of consumers, having regard to the need to preserve community rating in the provision of helath insurance for essential health care.'.".
This amendment proposes that the Bill would not discriminate unfairly between registered undertakings, that it would promote competition in the provision of health insurance, and, most importantly, that it would protect the interests of consumers, having regard to the need to preserve community rating in the provision of health insurance for essential health care.
The Minister responded to these issues in the Dáil. Will they be taken into consideration by the independent health insurance authority? Will the Minister give the House an assurance that these issues will be addressed by the authority?
Mr. Martin: We accommodated paragraph (a) in the Dáil by way of an amendment I introduced on Report Stage whereby all parties will be treated equally by the health insurance authority.
Mrs. Jackman: I accept that point.
Mr. Martin: We take a different view than the proposals contained in paragraphs (b) and (c). This comes back to the philosophy underpinning the Bill. It is not the function or the overriding objective of the Bill to promote competition, but it will facilitate it. In other words, promoting competition is not superior to protecting community rating. In that sense, the amendment does not take proper account of the delicate nature of community rating, its central role in the success of the voluntary health insurance system and the need for a balance between stability and competition. We struck a balance between them.
The inclusion of a reference to promoting competition in the section could be interpreted as being a superior consideration to that of having regard to the need to preserve community rating. The amendment is wide-ranging in its applications and impacts as it covers the exercise of the Minister's and the authority's powers under the Bill.
The protection of the rights of consumers is already provided for in the Bill in that the health insurance authority must give overall consideration to the best interests of consumers in the application and triggering of risk equalisation. We have been responsive regarding paragraph (a), but are opposed to paragraph (b) on principle. The provisions in paragraph (c) are covered in section 9(10)(a)(iii) which states, "the best overall interests of health insurance consumers includes a reference to the need to maintain the application of community rating across the market for health insurance and to facilitate competition between undertakings". We are accommodating that principle.
Mrs. Jackman: The Minister has said many times that he would facilitate competition. I cannot see why he is saying that paragraph (b), which is promoting competition, is outside his remit. It does not require the Minister to promote it actively, obviously, but it would seek his support to do so.
Mr. Martin: If we put that into the Bill it would place a legal obligation to promote competition. The Bill represents a balance.
Mrs. Jackman: That is the whole point, I thought the amendment represented a balance.
Mr. Martin: We think it is tipping the balance the wrong way.
Mrs. Jackman: Paragraph (c) restores the whole area.
Mr. Martin: Paragraph (c) is accommodated in section 10(a)(iii) of the principal Act.
Mrs. Jackman: Can it be facilitated? Will the health insurance authority have any remit in facilitating it and maintaining a balance?
Mr. Martin: Yes, it has a remit in terms of facilitating competition. The principle that it has to take that into account is contained in the Bill.
Mrs. Jackman: The Minister is making a distinction between facilitating and promoting.
Mr. Martin: Yes, and that is fairly significant.
Dr. Fitzpatrick: Paragraph (c) negates paragraph (b). The problem we all face, however, is that if one promotes unbridled competition, the customer or patient will suffer. The best example is in the mobile phone sector where there are two major players and one small one coming in. The VHI and BUPA Ireland are dealing roughly with a market of one million people and they must provide the service. If one allows unbridled competition something will suffer, as in the American private health care system. In the end, the customer or patient is the one who will be let down as a result of this unbridled competition.
Mrs. Jackman: The term "unbridled" is exaggerated because there are two health insurance companies operating in the country at present and I do not see that they would provide unbridled competition. I may be wrong but we have not seen any such evidence so far. The Minister of State said there were a few little tremors as to whether people will come into the market. After the passage of the Bill we will see whether it will promote more competition. The word "unbridled" certainly exaggerates the number of health insurance companies that are queuing up to enter the Irish market.
Dr. Fitzpatrick: The point I was trying to make was that once the Bill is enacted that is it. If we allow marketing people in any company free rein they will go for market share and to hell with the consequences. That is the bottom line in business marketing today but we cannot allow that to happen.
Mrs. Jackman: Paragraph (c) accepts that we must have community rating. I am not saying that we must forget about community rating but I am seeking a balance between the two, as the Minister has also stated. The Minister is missing the point of the total amendment which seeks to maintain a balance.
Mr. Martin: We are giving a higher precedence to community rating.
Mrs. Jackman: Yes.
Mr. Martin: That is reflected in the language used in the Bill.
Mrs. Jackman: Exactly.
Mr. Martin: The Bill is carefully designed to reflect our commitment and underpinning of contributions.
Mrs. Jackman: I can accept the need for that but the term "unbridled" is exaggerated.
Mr. Martin: All right.
Amendment, by leave, withdrawn.
Mrs. Jackman: I move amendment No. 23:
In page 19, before section 13, to insert the following new section:
"13.--The following section is inserted after section 21 of the Principal Act:
21B.--The Authority shall report annually to both Houses of the Oireachtas on the performance of its duties and activities.'.".
This amendment would provide for the authority to report annually to both Houses of the Oireachtas on the performance of its duties and activities. I believe that this has been accommodated in the Lower House. The amendment seeks to reiterate the importance of having in the Bill such a provision for annual reporting.
Mr. Martin: The principal Act covers this matter in that the authority has to submit an annual report to the Minister which is laid before each House of the Oireachtas. As I indicated, elsewhere in the Bill we provide for the authority to report annually to the House on the operation of risk equalisation.
Amendment, by leave, withdrawn.
Sections 13 and 14 agreed to.
NEW SECTION.
Mrs. Jackman: I move amendment No. 24:
In page 19, before section 15, to insert the following new section:
15.--The Health Insurance Authority, as provided for in the Health Insurance Act, 1994, shall be constituted only after the Minister's nominees to serve on the Authority have been ratified for appointment by an Oireachtas Committee appointed by both Houses of the Oireachtas for such purpose.".
This amendment might be too late. Will the Minister indicate whether the nominees have been appointed? The amendment seeks that the health insurance authority should be constituted only after the Minister's nominees to serve on the authority have been ratified for appointment by an Oireachtas committee appointed by the Houses of the Oireachtas for such purpose. I would like the Minister to state what has happened to date concerning the membership of the health insurance authority.
Mr. Martin: This is the same amendment that was tabled in the Lower House.
Mrs. Jackman: Yes, it is.
Mr. Martin: I disagree with it in principle. There are hundreds of bodies - I am not talking about big State boards - to which we appoint people from the community. The idea that they should come in for some cross-examination by an Oireachtas sub-committee is one of which I would not approve. Though I think the amendment was tabled for different reasons, the matter requires far deeper consideration. We have nominated the members of the health insurance authority and I can assure the Senator that the appointments were made pursuant to my powers under the principal Act of 1994. The process of constituting the authority commenced a considerable length of time before the announcement.
As indicated in the White Paper, this process included consulting relevant independent bodies about the nomination of suitable persons to be considered for appointment to the authority. In that connection, nominations were put forward by the Society of Actuaries, the Office of the Director of Consumer Affairs and the Irish Insurance Federation. I am grateful to these bodies for responding and for the subsequent agreement of persons nominated to accept the request to participate in the authority in a voluntary capacity, as a public service. Senators will appreciate how important such a culture of public service is to our system of Government and administration. The authority is currently going about its work of preparing to undertake the important independent functions it will fulfil under the legislation. The people we have appointed are of high calibre and represent a broad mix of experience. I am confident they have the capacity to discharge their responsibilities effectively and impartially in the interests of insured persons and the health insurance sector. I can also confirm that there is no Cork person on the health insurance authority. Perhaps that is one of the reasons the amendment was tabled.
Mrs. Jackman: I will read that with interest. On a point of clarification, will the Minister indicate the numbers of nominees from the three bodies he mentioned?
Mr. Martin: Five.
Mrs. Jackman: The Minister mentioned the Society of Actuaries.
Mr. Martin: We consulted those bodies about appointments. We had nominees from the Society of Actuaries, the Office of the Director of Consumer Affairs and the Irish Insurance Federation.
Mrs. Jackman: How many does the Minister have?
Mr. Martin: We have one each from those bodies.
Mrs. Jackman: Just three.
Mr. Martin: No, there are five on the authority.
Mrs. Jackman: Yes, but what about the other two?
Mr. Martin: I do not have the names of the other two with me.
Mrs. Jackman: It makes no difference.
Mr. Martin: They were nominated and recommended to me by the Department.
Mrs. Jackman: There is a total of five on the authority?
Mr. Martin: They are of an academic disposition. One of them has experience in the area of economics.
Mrs. Jackman: The amendment was not submitted specifically to keep Cork people out.
Mr. Martin: I know it was not and I did not say that.
Mrs. Jackman: That would have been very discriminatory.
Mr. Martin: I thank the Senator.
Mrs. Jackman: The amendment was tabled to ensure that the persons appointed would provide the best available expertise from the bodies.
Mr. Martin: I accept the right of any Deputy or Senator to state the basis upon which they think people should be appointed. People are entitled to do that in a democracy, but I have a different view on it. I do not think everybody we appoint to a committee or board should have to go through an Oireachtas committee. That is my personal view but others may differ.
Mrs. Jackman: Yes, they do.
Amendment, by leave, withdrawn.
Section 15 agreed to.
1 o'clock
Title agreed to.
Bill reported without amendment, received for final consideration and passed.
