Written Answers – Department of Health: Health Insurance Community Rating (18 Feb 2014)

Séamus Healy (Tipperary South, Independent)

756. To ask the Minister for Health if he will review the risk equalisation scheme currently in operation having regard to the fact a significant proportion of the elderly are now insured by companies other than the VHI; and if he will make a statement on the matter. [8162/14]

James Reilly (Minister, Department of Health; Dublin North, Fine Gael)

The Risk Equalisation Scheme provides for a cost subsidy from younger, healthier people to older less healthy people and the compensation is provided in favour of the individual consumer and not in favour of any particular insurance company. A company with a worse than average risk profile (and therefore higher claims costs) will be a net beneficiary from the scheme while a company with a greater proportion of younger and healthier people will be a net contributor to the scheme but will benefit considerably from having much lower claims costs. Therefore, all insurers are in receipt of payments from the Risk Equalisation Fund in respect of their older customers, based on the number of older persons they have insured. I would encourage all commercial insurers to actively recruit older members to further balance spread of older customers.