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from previous section
The Minister said on Committee Stage that he would give some thought to this. Has he done so, and what are his views on these amendments? Is the House agreeable to dealing with amendments Nos. 3 and 4 together? An Leas-Cheann Comhairle: Amendments Nos. 3 and 4 relate to two different questions which would have different effects on the Bill. They must, therefore, be dealt with separately. Mr. Martin: Amendment No. 3 seeks the deletion from the Bill of terms which prohibit cash plans from paying benefits direct to health service providers. This requirement is intended to ensure that 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 the situation recurring, such as that dealt with by Deputy Noonan as Minister for Health, where 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. Based on the evidence available to my actuarial advisers, it is certainly the case here and in the United Kingdom that benefits payable under cash plans are predominantly paid to the individuals rather than to service providers. An inquiry made by officials in my Department during the course of recent discussions with a major UK cash plan provider confirmed that as benefits are paid directly to the customer, a provision of the kind contained in the Bill was not a particular matter of concern or objection. We want to keep clear blue water between cash products and indemnity products. That is why I cannot accept the amendment. Amendment, by leave, withdrawn. Mr. G. Mitchell: I move amendment No. 4:
Mr. Martin: That has been met by an amendment I tabled on Committee Stage. The section now incorporates wording which exempts from the definition of a health insurance contract any insurance contract or insurance arrangement 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. Therefore, the Deputy's point is met by the Committee Stage amendment. Amendment, by leave, withdrawn. Mr. G. Mitchell: I move amendment No. 5:
I raised this matter on Committee Stage. The purpose of this amendment is to make it clear that the State is not seeking to extra-territorially impose control on health insurance business conducted from outside the State by a registered undertaking. There are many amendments to go through between now and 1.30 p.m. I will not, therefore, make a meal of these amendments, but I would like to know whether the Minister has considered this matter in the interval and what his views are. Mr. Martin: We discussed this on Committee Stage. It is not considered necessary to include these words in the definition. 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 contract. Such contracts are defined as being contracts of insurance, or any other insurance arrangement, which would provide for the making of insurance or any other insurance arrangements which provide for the making of payments, especially for the discharge or reimbursement of charges in respect of the provision of hospital in-patient facilities 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 to say, services of such a kind to be provided within the functional area of a health board. Therefore, health insurance contracts relate to health services to be provided to persons within the State. The provisions of this Bill cannot in any way impinge upon the right of insurers who are authorised to conduct the relevant class of business covering sickness insurance in another EU member state to engage in the provision of such services to Ireland on a service basis. Under the EU directive, an insurer is not obliged to establish an office or branch in another member state as a condition of engaging in business there. We previously received legal opinion on other matters which touch materially on this subject. That legal opinion 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 contracted to be provided to somebody who is outside the State and, save in limited circumstances, will be provided outside the State. Amendment, by leave, withdrawn. An Leas-Cheann Comhairle: We now come to amendment No. 6 in the names of Deputies Gay Mitchell, Neville and Ring. Amendments Nos. 13, 14, 18, 20, 23 and 24 are related and will be taken together, by agreement. Mr. G. Mitchell: I move amendment No. 6:
Amendment No. 6 proposes the insertion of a new subparagraph; amendments Nos. 13, 14, 18 and 24 propose substituting the word "relevant" for the word "insured"; and amendment No. 23 proposes in page 16, lines 4 to 6, to delete all words from and including "insured" in line 4, down to and including "the" in line 6 and substitute "relevant risks is a reference to risks of such class or nature as may be prescribed which have been respectively insured by the registered". |
| I am advised that those
technical amendments would ensure the comparison of the nature and
distribution of risks among registered undertakings is carried out on
the basis of comparable risks. That is the objective of the
amendments. We had some discussion on this on Committee Stage, and the
Minister was not particularly well disposed to the amendments. I raise
them again in the hope that the Department officials have had an
opportunity to consider them in the meantime. Will the Minister
consider accepting the amendments? What are his views on the
distribution of risks among registered undertakings? Would this
provide a basis for comparable risks?
Mr. Martin: We had a very extensive discussion on these amendments on Committee Stage because they touch fundamentally on the whole area of risk equalisation and how it will operate. My view on the imperative of having risk equalisation to underpin our community rating system has not changed. It is important to appreciate that at all times, even going back to the introduction of the Principal Act, it has been indicated by successive Ministers that risk equalisation would be a central feature of our health insurance policy and regulatory framework. It is also important to bear in mind that risk equalisation measures are permitted under the EU's Third Non-Life Directive. We are in no doubt about that arising from our extensive contacts with the EU Commission's Services. Our private health insurance system operates on the principle that insurers must accept all comers, irrespective of their 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, the old, the healthy and the sick. People do not have to buy health insurance, so clearly their trust and confidence in the long-term stability of the system is vital if this solidarity is to be maintained. I went into considerable detail on the value and importance of risk equalisation to the entire system. It is important to realise, even for consumers of health insurance, that there is a serious danger that if the market were to be destabilised and significant variations in risk profiles emerged and some insurers ended up with a younger, healthier population, they would be able to charge a lower premium. The other side of the coin is that the premia will inevitably rise for those insurers who are left with a higher proportion of less healthy individuals. On Committee Stage I drew attention to two real situations where the absence of risk equalisation caused difficulties in international health insurance markets. One of the situations was instability experienced in the Netherlands during the 1970s and 1980s where market equilibrium was unravelled by risk selection and premium differentiation. The second is the case of a German sickness fund. The German insurer concerned, BKK Stadt Hamburg, has recently run into serious financial difficulties due to the high cost of health care in the Hamburg region and the fact that the fund has experienced a disimproving claims ratio due to a loss of younger, healthier clients for which it was not adequately compensated by the existing German risk equalisation system. The German Government commissioned an expert group to review the development of the risk equalisation system. The group reported in February and recommended that the existing risk equalisation system be strengthened. With regard to the proposed amendment, the purpose and intended impact of introducing the term "relevant risks" is unclear. Furthermore, its intended replacement of the term "insured risks" throughout the Bill is unsatisfactory. The definition refers one to section 12(10)(a) of the Bill but when one gets there all one finds is that it involves a reference to risks of such a class or nature as may be prescribed. This does not take the Legislature very far in terms of knowing what it is 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 which seek to remove a reference to the risks as represented by the entire insured population, who have traditionally contributed to and enjoyed the benefits of intergenerational solidarity through community rating, and replace it with a more selective but unspecified concept of relevant risks. There would have to be a full explanation of what this concept involves, whom it would benefit and how it would support the application of community rating across the insured community before it could be understood, let alone adopted as law. If the intention is to permit segmentation of the market or in any way impede the flow of intergenerational transfers which underpin effective community rating, this would not be acceptable and does not appear to support the broad solidarity principle which has underpinned the country's community rating system of voluntary private health insurance for many years. Amendment, by leave, withdrawn. An Leas-Cheann Comhairle: Amendment No. 31 is related to amendment No. 7. Is it agreed that amendments Nos. 7 and 31 be discussed together? Agreed. Mr. G. Mitchell: I move amendment No. 7:
We discussed this matter on Committee Stage. I asked the Minister to consider whether section 2 of the Voluntary Health Insurance (Amendment) Act, 1996, might be strengthened and improved by the proposal to include the words "and may provide such other services, including services to persons outside the State, as it may think fit". Is the Minister satisfied that section 2 of that Act is satisfactory or would he agree that this amendment would improve the health insurance industry and confer on health insurers a power that would be beneficial to them? Mr. Martin: These amendments relate to or arise from the inclusion of an amendment to the Bill to extend the powers of the VHI in relation to the products and services it is empowered to provide. On Committee Stage the amendment I brought forward to address this issue was accepted. This now stands as section 12 of the Bill, so progress was made in extending the range of products and services the VHI can offer. Section 12 should be sufficient to meet the needs of the board, pending legislation to address the matter of its corporate status. Amendment No. 7 would give the VHI undefined powers in the services it could provide and 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 give the VHI the power to provide any services it saw fit to provide. However, on 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 to new schemes and the VHI's exemption from meeting the normal requirements for authorisation as an insurer. It is considered appropriate, therefore, that any new schemes should be subject to the approval of the Minister and, where necessary, any regulatory or other conditions he or she may deem appropriate. The unspecified approach could give rise to competition issues with other insurers if the VHI were to engage in new forms of business without complying with the required general insurance regulatory provisions. In that context, I cannot accept amendment No. 31. Its acceptance could be construed as meaning that the VHI was authorised to offer health insurance outside the State. The VHI is not an authorised insurer under the general body of insurance legislation as administered by the Department of Enterprise, Trade and Employment and is not, therefore, in a position to offer health insurance in another jurisdiction. The amendment we made on Committee Stage is sufficient at this stage of the process. The overall issue will have to await change in terms of the corporate status of the VHI and further measures that will be put in place in that regard. Ms McManus: Could the Minister explain further the changes in the corporate status of the VHI, since he has raised the issue? Mr. Martin: We appointed advisers, jointly with the Department of Finance, on that issue. They are conducting a review of that and will give us their advice. Ms McManus: Has the Minister any idea when this advice might be forthcoming? Mr. Martin: In a number of months. It is a serious undertaking with serious implications, and obviously it will not be done in a number of weeks. Nobody anticipated it would. Ms McManus: I refer the Minister to the programme for Government which mentions a strategic partner for VHI. That programme was published over four years ago. Mr. G. Mitchell: He is leaving it for the incoming Government. Amendment, by leave, withdrawn. An Leas-Cheann Comhairle: Amendment No. 8 is consequential on amendment No. 9 and amendment No. 10 is related. Is it agreed to discuss amendments Nos. 8, 9 and 10 together? Agreed. Mr. Martin: I move amendment No. 8:
Amendment No. 9 provides that subsection (1) "does not apply to any arrangement entered into by an employer whereby he or she agrees to discharge the whole or part of an excess amount payable by an insured person or reimburse, in whole or in part, such a person in respect of the payment by the person of such an amount". The amendments arise from a recent approach by Bupa to my Department. Bupa advised that the provisions of section 4 could impact on products it currently offers. This matter was not specifically raised by Bupa in previous discussions with the Department. Bupa drew attention to the excess provision contained in some of its existing products. These products provide that where an episode of private hospital care is required, the person named on the contract bears a liability, depending on the insurance plan involved, of between £50 and £100 of the costs that arise. Such amounts are stated in the policy and are generally referred to as deductibles. It advised that in some cases employers are paying these amounts on behalf of employees. The proposed amendment provides that in such situations the payment of the excess amount by the employer will not be deemed to be a health insurance contract. The proposed amendment has been framed so that deductibles are permitted but liabilities, which arise due to the insured person availing of care in a higher level hospital than that provided by his or her insurance, are not. While I have brought forward this amendment to avoid the possibility of impinging upon existing business practice, I emphasise that any significant expansion of self-insurance by employers would be a potential threat to the stability of community rating and it is not the intention to facilitate such developments as evidenced by the thrust of the section. I would not envisage, therefore, that the amount which may be prescribed would be increased significantly in the future and consider that any possible impact of the exemption on community rating will have to be kept under review. We have provided for a figure of £100 in the amendment. Mr. G. Mitchell: The Minister's amendment states:
How would that amount be prescribed? Can the Minister change it to £200 by regulation or by order? Mr. Martin: Yes. |
| Mr. G. Mitchell:
I take it that is by order. Amendment No. 10, seeks to amend page 6,
between lines 18 and 19, to insert a new subsection. The purpose of my
amendment is that the principal Act of 1994 would make clear that
employers are capable of carrying out certain acts. On Committee Stage
I stated that section 4 inserted a new section 2A in the principal Act
and the purpose of that was to ensure that employers would be
prevented from self-insuring their work force. According to the view
which has been expressed to me, this would also prevent employers from
meeting any costs which an employee would have to pay because he or
she was beyond the cover provided by his or her insurance, for
example, in respect of a pre-existing condition excluded by the
insurer. In my amendment, I am trying to make clear that such
employers would not be required to register as health insurers. If the
Minister can assure the House that this is not necessary and that what
I am seeking can be done without this provision, I am happy to accept
that, but one reading of this is that some employers may not be
allowed to do what I am seeking because they would have to register as
health insurers, if the legislation remains as it stands. I want the
Minister to consider that point. We teased this out on Committee
Stage. Is the Minister satisfied that the provisions are satisfactory?
Ms McManus: I accept the Minister's point on this. However, I am concerned about how his amendment is framed because there are potential dangers for community rating. The Minister's amendment states that the excess amount means "an amount (not being an amount that exceeds £100 or such other amount as may be prescribed" by regulation, as the Minister says, or that is payable to the insurer. I realise that now we will talk about regulations and the system of accountability to this House. If in the future a change was made, would the Minister be constrained by having to come back to the House or to lay regulations before the House, or if it is in order can he simply make an order to change this? There is a potential at least to create a certain amount of unfairness in the system. It may be a slight danger but I would like to be clear that when the Minister says he would make an order, is that something which he would make and which nobody need know about apart from those who would benefit? Mr. Martin: We have a problem with Deputy Mitchell's amendment No. 10 in so far as it provides that an employer, who agrees to reimburse or discharge the fees or charges incurred by employees or any dependent 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. An opportunity for significant self-insurance of this kind on the part of employers would 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 large employers in the United States, would threaten the solidarity between generations which underpins community rating, and providing scope for the development of risk-rated gap insurance products by insurers would have a similar effect. The amendment, if accepted, would provide an opportunity for insurers to segment the employer paid portion of the market by offering the minimal 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 going forward. I have brought forward an enabling amendment, which I just dealt with along with amendment No. 8, which bears on this area in the light of practice in the employer paid sector of the market which was very recently brought to the attention of the Department. That moves to cover existing products, but the Deputy's amendment would really open the door to employer self-insurance across the market and that would clearly undermine the community rating principle, which has been that of successive Governments. On the regulations, there is an amendment to which we will come which relates specifically to the risk equalisation scheme and that would have to be brought back to the House for affirmation. However, in terms of this part of the Bill, the existing situation applies and, therefore, the Minister could introduce a regulation. That regulation could be annulled by the House. I take Deputy McManus's point, that in the future it is subject to the disposition of the Minister of the day. On the other hand it would be unusual to set in stone a fixed amount forever and that would require the introduction of primary legislation. Mr. G. Mitchell: I do not quite understand the Minister's reasoning regarding my amendment No. 10. It seems to me that this would prevent the employer, if things are left as they are, from meeting any costs which an employee would have to pay because he or she was beyond the cover provided by his or her insurance, for example, in respect of a pre-existing condition excluded by the insurer. If somebody had a pre-existing condition, which is excluded by the insurer, is the Minister telling the House that employers could meet this and that it would not be necessary for these employers to register as health insurers? Supposing a person has a pre-existing condition and, therefore, cannot get insurance cover for that condition. In such a case if the employer of that person has a scheme whereby the employer will pick up the insurance costs not covered because of the pre-existing condition, does that employer have to register? Acting Chairman (Mr. O'Malley): The Minister has spoken twice and he can only reply to his own amendment from now on. This is not Committee Stage and the section has not been recommitted. Mr. G. Mitchell: Chairman, there are three amendments being discussed together. Ms McManus: On the Minister's amendment, while he rejects the Fine Gael amendment because there is a danger of creating unfairness or difficulties with community rating, he has not convinced me that will not happen on foot of his amendment. While the limit is being set at £100 the door to extend it remains open - I may be wrong on this and I am willing to learn. One could imagine this becoming quite an issue, particularly if an insurer is keen to get around community rating, for many of the larger international companies operating here who offer to pay health insurance for their employees in order to hold on to them. I have been very supportive of the general thrust of this Bill. Can the Minister assure me that the situation I have outlined will not arise as a result of the introduction of this amendment? Mr. Martin: Deputy McManus has been very supportive of the principle of community rating and risk equalisation. One has to adopt a balanced approach on this issue. We are setting a very low limit of £100. I cannot guard against future Ministers introducing different regulations. I cannot offer any guarantees against what future Ministers could do in this area. Future Governments may have a different perspective on the risk equalisation issue and could bring forward changes to whatever regulatory scheme we introduce. I cannot offer the Deputy any guarantees on that front other than to point out that we have introduced a very low limit by way of seeking to cover products already in the market. This matter was brought to our attention by a particular insurer. It was never our intention to impinge on other products. Amendment agreed to. Mr. Martin: I move amendment No. 9:
Amendment agreed to. Mr. G. Mitchell: I move amendment No. 10:
Amendment put and declared lost. Acting Chairman: Amendments Nos. 11 and 30 are related and may be taken together by agreement. Agreed. Ms McManus: I move amendment No. 11:
I note the Minister has tabled an amendment to the same section. I am concerned about the regulations which will govern the risk equalisation scheme. On principle, I think all regulations should be debated by this House as part of overall legislation. The ombudsman was very critical of another area of health care where regulations were not open to scrutiny. As regards the risk equalisation scheme, it is very important that a draft be approved by both Houses before the workings of the regulatory authority and its terms of reference are proceeded with. I would like to thank the Minister's officials for providing us with a briefing of this very technical area. Deputy Mitchell and I very much appreciate the fact that we are able to discuss this issue with them. The Minister indicated on Committee Stage that he would be considering the risk equalisation scheme in the context of introducing a range to deal with an imbalance between insurers and that the trigger point would be set at between 2% and 10%. He also said this would be prescribed for in the regulations. Mr. G. Mitchell: We are not dealing with that matter yet. |
| Ms McManus:
It relates to the regulations. That seems to me to be very wide
ranging in terms of its impact. Let us say the authority waited until
the 10% limit had been reached before taking action. At 10%, one could
be, unnecessarily, doing major, or even mortal, damage to one insurer
simply because the authority has that range of judgment. That is not
very practical. The 10% limit is very high in terms of the scheme
actually working and delivering the protections and safeguards it is
designed to deliver. The figure previously mentioned - I do not recall
it in the Bill - may be included in the regulations.
I would express grave and serious objection if this range were prescribed in the regulations. We need to take another look at that issue. It is important that we take this opportunity to ensure the regulations are laid before and approved by both Houses of the Oireachtas. This is a very important part of the work of the authority, it is probably the central part of its work. It is also a very important issue in terms of ensuring stability in the health insurance market. Mr. G. Mitchell: I also wish to thank the departmental officials for their detailed briefing on risk equalisation and the Minister for his courtesy in making them available to us. It is my understanding that the characteristics of the arrangements relating to any commencement of risk equalisation are that it would be based on the exercise of a major discretion by the HIA as an independent authority and that it would commence only in certain circumstances where material distortion emerges in the risk profile of insurers. As Deputy McManus stated, material is being defined as between 2% and 10%. It would be open to the HIA to take account of all relevant considerations in the exercise of its discretion but they must have regard to the facilitation of competition and must be satisfied to recommend the commencement of risk equalisation in the overall best interests of health insurance consumers and notification to insurers of proposed action as regards the commencement - opportunity for insurers to make representations - must be taken into consideration before finally determining the action to be taken. They are the characteristics which surround the regulations. I and other members of my party agree with the introduction of a range from 2% to 10%. The risk equalisation scheme will, according to the briefing we have received and the understanding we have of this Bill, require the approval of each House and the Minister will submit an annual report by the HIA to each House in the event of risk equalisation transfers having come into play. These regulations are of such significance that it would not be possible for us to agree to them simply being laid before the Houses or being place in the Library. We will require a debate on them in this House. We will have to give some careful attention to the regulations because the devil could be in the detail. We need to make sure that we get it right. That is my main concern about the regulations. The undertakings given by the Department of Health and Children and the characteristics which the Department have set out are certainly an improvement on the situation as discussed on Committee Stage. I ask the Minister to give an undertaking to the House that the regulations when made will be brought before the House for debate and for detailed consideration because it is an area of concern to us. Mr. Martin: My amendment No. 30 meets the requirements of both Deputies, and is to ensure that any riskequalisation scheme must come back to this House for affirmation and that a motion to that effect, a resolution approving of the draft, must be passed by each House. This was discussed on Committee Stage and I am happy to bring forward amendment No. 30, in line with the commitment I gave on Committee Stage, to give effect to that. Between now and draft resolution stage, we will be reflecting on what Deputies McManus and Gay Mitchell have said. I suggest that the appropriate time for the discussion on the detail of the deregulatory scheme is when it comes back to the House in the form of a resolution to be approved by the House. Amendment, by leave, withdrawn. Acting Chairman: Amendment No. 12 is in the names of Deputies Gay Mitchell, Neville and Ring. Amendments Nos. 12, 19, 21 and 22 are related and are to be taken to together, by agreement. Agreed. Mr. G. Mitchell: I move amendment No. 12:
I hope when the Minister is drafting his regulations he will take into account some of the points I have raised in these amendments. Amendment No. 22 proposes amendments which would require the Minister and the Health Insurance Authority to consider whether risk equalisation is necessary by reference to three criteria, and I set out the criteria. I will not press these amendments because it would be preferable to discuss this detail when the regulations are laid before the House. I ask the Minister to consider the points made in these amendments to see whether they can be accommodated in the regulations. Amendment, by leave, withdrawn. Amendments Nos. 13 and 14, not moved. Ms McManus: I move amendment No. 15:
This amendment is about the assessment of the performance of an insurer. I have expressed concerns about the difficulties and I can see that it is not possible to have a scientific formula to measure performance in terms of costs, but there is a very strong emphasis on age and gender which makes sense. However, it seems that there is still a risk that inefficiency can be rewarded within the risk equalisation scheme if the ways of measuring the costings are not as efficient as possible. Good practice should be encouraged, and good practice would be the reduction of hospitalisation costs, preventative health care and promotion and care in non-hospital settings. We are all agreed that too many people end up in hospital and it is very costly. I raised this matter on Committee Stage and explained the thinking behind it which is that good practice should be rewarded and not penalised. The Minister in his response was open to the principles in the amendment and he did say that we could return to the issue at Report Stage. We are now at Report Stage, and I do not think the Minister has come up with anything to address this issue. I ask the Minister to respond because there is a serious intent in the amendment which must be addressed. It may require to be addressed in the bigger context of health reform but we should adapt and apply good principles even within a largely technical Bill such as this. Mr. Martin: The principles behind the amendment are ones with which I would not quibble in terms of the emphasis on prevention and disease management programmes. The proposed risk equalisation framework deals with episodes of in-patient care. However, it does not prevent insurers focusing, in the first instance, on primary care. Under the proposed framework, risk equalisation will incorporate up to 50% of the claims experience of the insurer concerned and 50% of the market experience. As risk equalisation will not compensate in full for the differences in risk profiles of different insurers, and any transfers arising will be based on the costs of the insurer who will have to make the payment, insurers relying on necessary or inefficient in-patient treatment will be disadvantaged by the proposed scheme and would be better off avoiding hospital treatment if possible. Similar provision will be made in due course when the risk equalisation scheme is to incorporate diagnostic related groups as only the more serious procedures will form part of the risk equalisation pool. It is intended that, ultimately, risk equalisation will be case mix based, with a focus on equalising only more resource intensive types of in-patient discharges. The proposed framework for risk equalisation focuses on hospital care as episodes of such care represent most of the overall health insurance claims costs and, in addition, the frequency, diversity and nature of primary care benefit structures make their inclusion in a risk pool particularly problematic and difficult to justify on a cost benefit basis. Another practical difficulty in adopting the Deputy's amendment concerns the ability to quantify, cost and verify the reduction in hospitalisation costs which arise from prevention and disease management. The Department has looked at that but there is a question about how it could be done. Before an element such as this could be adopted into law, there would need to be a definitive method for quantifying everything and it would be extremely difficult if not impractical. The approach being taken, not to fully equalise insurers' experience as regards utilisation of hospital services, is considered to strike the necessary balance as regards the recognition of other non-hospital approaches to the treatment and management of illness and disease. Ms. McManus: I look forward to the debate on the regulations. Amendment, by leave, withdrawn. 1 o'clock Acting Chairman: The next amendment is amendment No. 16. Amendments Nos. 17 and 26 are related. It is proposed to take amendments Nos. 16, 17 and 26 together by agreement. Is that agreed? Agreed. Mr. G. Mitchell: I move amendment No. 16:
Amendment No. 16 would require any risk equalisation regulations to be kept under review and be reported on annually to the Oireachtas. Given that that is achieved by the Minister's amendment No. 26, I do not intend to press it to a vote. I am pleased the Minister has taken on board the objective of my amendment. Amendment No. 17 "In page 13, line 27, after "paragraph (c)" to insert "and shall only have effect for so long as the Minister determines" would empower the Minister to provide for the duration of any payments under the risk equalisation scheme. I do not know whether the Minister intends to provide for a section of this kind in the regulations which he will bring forward. Perhaps he would address this matter when replying. Will the Minister explain subsection (4) of amendment No. 26 before we decide on this amendment? Mr. Martin: Amendment No. 26 meets the central requirement of amendment No. 16 which seeks to provide that the authority would report annually on risk equalisation payments. I indicated on Committee Stage that I would provide for that. It strengthens the role and independence of the authority while ensuring that the Oireachtas can have an appropriate oversight of developments in this key area of regulatory provision. I accept that risk equalisation is a necessary support to the effective operation of community rating and open enrolment. As a result of that the Oireachtas should be kept informed of developments on the issue. In regard to amendment No. 17, it must be fully appreciated that risk equalisation is essentially a stability measure and as such should not be inconsistent in its application. I know of no other country where risk adjustment measures are organised on an intermittent basis. This approach of itself would promote uncertainty and instability in the regulatory process and it would certainly represent a less than effective counter to the incentive of insurers to engage in risk selection. It ignores the fact that risk equalisation only redistributes risk differences that exist and addresses the situation where one part of the insured population has to pay materially more for cover simply because the insurer is unfortunate enough to have a higher risk population. Where these differences cease to exist or where the risk profiles begin to converge the impact of risk equalisation diminishes proportionately. Given that it is an ongoing process we are not in a position to accept amendment No. 17. Subsection (4) of amendment No. 26 states:
In accordance with section 12(10)(a)(i) a health insurance consumer is a reference to a person other than the registered undertaking. Amendment, by leave, withdrawn. Amendment Nos. 17 to 24, inclusive, not moved. Ms McManus: I move amendment No. 25:
This matter was discussed on Committee Stage. It seems to us that 36 months is a long time when the White Paper proposed an 18 months time frame for exemption from the risk equalisation scheme for new insurers. The Minister said there was consultation on this issue following the publication of the White Paper. Is there an implication that those who produced the White Paper did not consult or that the Minister was more vulnerable to pressure. Certainly the risk equalisation is not a new notion but his predecessor put everything on hold. We now have a Bill which provides for an extended start up time. It is important to note this and indicate that the time frame provided for is being extended to a lengthy time frame. It is difficult to see how it can be justified. Mr. G. Mitchell: The amendment in my name and that of Deputies Neville and Ring is precisely the same amendment as that tabled by Deputy McManus. I share her concerns. I raised these concerns on Second Stage and on Committee Stage. What is the reason for the 36 months time frame? At present VHI and Bupa are in the market. Do we take it from this that there is at least one other, and perhaps more, companies preparing to enter the market? Are insurers preparing to enter the market asked specifically for the 36 months time frame? If the House was to be told that one, two or three more companies were preparing to enter the market and compete I could understand the reason for it. Given that the White Paper made a proposal for 18 months, no reason has been given for it being 36 months, except that the Bill simply carried the amendment. Why do we need a derogation of 36 months in the case of new entrants to the market? I do not consider that the case has been made. There may be a case that we do not know. From where did it come? Are we about to enjoy further competition in the industry? Is it because an applicant or applicants are waiting to enter and have asked for a 36 months time frame? What is the background to it? What was wrong with the 18 months period? Mr. Martin: The 18 month period has not produced additional competition in the form of new players into the market. It has been a broad objective of successive Governments to increase competition in the health insurance market. There are some indications that people would be interested in coming into the market place. This Bill in so far as it provides for a regulatory framework and the updating of it, is an important factor in anyone's decision to come into the market place. |
| Mr. G. Mitchell:
Is there more than one?
Mr. Martin: I cannot say if there is more than one at this time but there are indications that people are looking seriously at the market. Some people suggest the 18 months start up is not a sufficient window for a new player to come into the market. A period of 36 months gives a greater opportunity for a company to successfully establish itself in the marketplace and then adhere to the risk equalisation regulatory framework. It is designed to facilitate additional competition in the health insurance market. Mr. G. Mitchell: If the House consents to 36 rather than 18 months, and taking into account that he will be bringing statutory regulations before the House, will the Minister take the opportunity to address the case of entrants to the market that may be subsidiaries of a non-resident insurer? The accounts requirements on the VHI should be the same for BUPA and any new entrant so that they cannot avoid having to publish their full accounts by virtue of being a subsidiary of a non-resident insurer. If we are to have a level playing field and risk equalisation and if we are going to give new entrants up to 36 months, then the Minister and his Department should address the question of transparency in the published accounts of insurers operating here. Ms McManus: There has been some doubt about risk equalisation. However, does the Minister agree that the major reason for not having any new entrants is that the Government does not have a position on the future of VHI and this would have a great bearing on an insurer considering entering this country? Mr. Martin: That view was put to me by the VHI very recently. I do not necessarily accept that it is the main reason other players have not come into the market. There are a number of issues and the passing of this Bill will be important in letting insurers know what they are getting into. Many of them have been holding off until the Bill was passed. Deputy McManus is correct in saying that risk equalisation per se does not seem to be a barrier to entry. Issues that were believed to be barriers include the products that could be offered and the window issue. Everybody would accept that there is a start up period before marketing a product for the first time. Any company setting up here would have to work within the Department of Enterprise, Trade and Employment's regulatory framework for all companies, particularly relating to publishing accounts. The Health Insurance Authority will have to have access to all the accounts, claims. etc., of all the players. Mr. G. Mitchell: The Minister might check that. Mr. Martin: I will check that out. Amendment, by leave, withdrawn. Mr. Martin: I move amendment No. 26:
Amendment agreed to. Acting Chairman: Amendments Nos. 27 and 28 are related. It is proposed to take amendments Nos. 27 and 28 together by agreement. Is that agreed? Agreed. Mr. Martin: I move amendment No. 27: In page 17, between lines 33 and 34, to insert the following:
This amendment follows a discussion at Committee Stage. There is a requirement on anybody dealing with legislation, whether the Minister or a statutory body, to be fair to all parties concerned in relation to its application. Given the wishes expressed by Deputy Mitchell at Committee Stage, I am bringing forward this amendment that will explicitly require the Minister and the authority to treat undertakings equally in similar circumstances. The amendment is framed to show that where there are differences between undertakings and circumstances which require different treatment under the Act, for example, significant differences between the risk profiles of their respective memberships, then the Minister or the authority may discharge their respective responsibilities accordingly. Quite apart from this provision, I have every confidence that the independent Health Insurance Authority will conduct its affairs in relation to the operation of a voluntary private health insurance system in a scrupulously fair manner. I am sure the Minister of the day will be no less diligent in that regard. Mr. G. Mitchell: I thank the Minister for bringing forward this amendment. It certainly meets in part my concerns raised at Committee Stage and as set out in amendment No. 28. It deals in particular with 21A.(a), which reads "does not discriminate unfairly between registered undertakings". The Minister's amendment seems to meet that element of my amendment. I am a little disappointed to note that he did not go the whole hog and take on the other proposals contained in my amendment which would require the Minister and the authority carry out their functions and exercise the powers conferred on them in a manner which promotes competition in the provision of health insurance and protects the interests of consumers, having regard to the need to preserve community rating in the provision of health insurance for essential health care. He has provided for the other part of my amendment so I suppose that half a loaf is better than no bread. I am anxious to ensure that the best interests of the consumers are protected, taking into account the need for competition and the need to have stability in the market. However, I am glad we have made some headway on this. It is an improvement in the legislation and so I will not be pressing my amendment. Amendment agreed to. Amendment No. 28 not moved. Mr. G. Mitchell: I move amendment No. 29:
The Minister, through his officials, has given in his undertaking that the objectives in amendment No. 29, that the authority shall report annually to both Houses of the Oireachtas on the performance of its duties and activities, will be met. I am glad to see that those concerns that were expressed at Committee Stage have also been taken into account. I ask the Minister to confirm that the concerns set out in the amendment will be fully met and the authority will report annually to both Houses. In recent years non-commercial State-sponsored bodies have had their remit extended as recommended by a committee which I chaired to ensure that an accounting officer is appointed and that officer will appear before the Public Accounts Committee. Can the Minister confirm that this will be the case for the Health Insurance Authority? This would ensure that from a financial accounting point of view there would be direct accountability to the House. The Health Insurance Authority should also be available to the Oireachtas Committee on Health and Children for examination, from time to time, in relation to the exercise of its duties. Ms McManus: I support Deputy Mitchell's comments. That there is a safeguard of an annual report requirement in a Bill does not always mean it will be published within a reasonable period. Reports are sometimes so slow to appear that the issues are out of date by the time of publication. This greatly diminishes the value of annual reports. There is also a tendency for Departments to sit on reports. The report of the Inspector of Mental Hospitals is one such example. Every year, the effort to get this report out of the Department of Health and Children is just like pulling teeth. These reports are of public interest, they are paid for by the public, they do not belong to Departments and there is an onus to publish them to ensure the public interest is served. Mr. Martin: In responding to the amendment, I refer the House 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. That is already contained in the principal Act. This will ensure that both the Minister and the Oireachtas will be advised of the authority's activities in executing its functions under the legislation. Also, under Section 32 of the principal Act, which relates to Deputy Mitchell's point, the annual accounts must be submitted to the Comptroller and Auditor General for audit. The Act requires the Minister to lay before the Houses of the Oireachtas the said annual accounts, and the Comptroller and Auditor General's report thereon. That also opens the door for the Committee of Public Accounts, if it wishes, to pursue any relevant matter. The provisions of the principal Act require the authority to operate at a high level of accountability and transparency, as well as specifically ensuring that the Oireachtas is kept informed of its activities. This amendment effectively duplicates provisions in the 1994 Act. On the point raised by Deputy McManus, the Taoiseach has emphasised that he wants up to date reports from a wide range of bodies. It is important that this new health authority should be in the mode of producing its annual report on time, soon after the end of the year, so that people can discuss it with some degree of relevance. Amendment, by leave, withdrawn. Mr. Martin: I move Amendment No. 30:
Amendment agreed to. Amendment No. 31 not moved. Mr. G. Mitchell: I move amendment No. 32:
The Minister knows exactly what I have in mind in this amendment. In the spirit of the debate on Report Stage, I do not intend to introduce a note of controversy, but I would ask the Minister to recognise that, in the appointment of the Health Insurance Authority, there are very well qualified people throughout the country. They do not all have to happen to live in the Minister's bailiwick. I hope the board will be independent and will be seen to be broadly based from the beginning. I will not press the matter any further than that. Mr. Martin: For the information of the House, we have actually appointed the Health Insurance Authority and there is nobody from Cork on it. I hope that information is reassuring to Deputy Mitchell. Mr. Roche: It was an oversight. Mr. G. Mitchell: There was nobody left in Cork. Amendment, by leave, withdrawn. Bill reported with amendments, received for final consideration and passed. |
| A whisteblower's protection
Bill will also more than likely be introduced.
There is also the Local Government Bill. The Lobbyists Registration Bill will be coming up, a number of codes of conduct will be introduced and on top of that one will have to submit a tax clearance certificate. That bank of legislation presents a fantastic encouragement to anyone who wants to become a Member of this House or enter politics at any level. Most of that legislation is recent. It is a pity things have come to this, but this is where we find ourselves. I welcome that the Minister spoke of the need to streamline this legislation, which previous speakers called for. This legislation should be consolidated and streamlined at some stage in the near future and put in such a way that the ordinary person in the street can understand it. Any eligible citizen of this State has the right to stand for election to this House and no obstacles, perceived or otherwise, should be put in his or her way. We should put all this information in as simple a manner as possible to enable a candidate who presents himself or herself for election to be presented with a book of guidelines outlining in simple terms what is required under the law and what might be required under it as it develops. That is crucial. I welcome the proposal that Members will only have to make one declaration of interest a year rather than two. Many of us may worry about what would happen if we were to miss the deadline. One would be castigated if one did and possibly incur a penalty. With regard to this and the other legislation I mentioned, in the event of a Member being investigated or complained about, there is a need to provide him or her with legal advice and possibly some form of administrative assistance. If one has been a Member of the House for ten years, 15 years or 20 years, one would have accumulated many documents. There is a skill in collating that information, filing it and having it to hand if one needs to use it as part of a defence or in evidence. Many colleagues spoke of the need to provide additional resources for Deputies and Senators and I hope the Minister of State has noted that. I had the happy duty last year of dealing with the Copyright Bill, which was one of largest and most complex Bills to come through this House. Little or no research back-up was available to Opposition Members. As the Minister of State will be aware, we get lobbied from people outside this House who put their cases, and that happened in this case. I am not an expert on copyright law, there are very few of them in this State, and I and others relied on their expertise. A number of us had to tease through the Bill line by line and it was cross-referenced, but the committee has no research back-up and the committee members do not have any administrative back-up. There were major issues at stake in regard to that Bill. We are the largest exporter of software in the world. I must compliment the Minister of State, Deputy Kitt, who dealt with that Bill. The committee met on 32 occasions and we dealt with the Bill over a number of months. When we completed our consideration of it, the Bill was totally changed from the one that was initially presented by the Department. That was done in spite of our having no research back-up. If that had been available, our task would have been easier and the Bill may have been dealt with sooner and further improved. Previous speakers raised a number of issues regarding this Bill, one being that of vexatious and malicious complaints and innuendo. As public representatives we are probably more vulnerable than anyone else to innuendo and rumour. If a Member says something or does not say anything and a remark about it is partially reported in the newspapers, that can do terrible damage, as it can grow wings and develop a life of its own. Previous speakers suggested a procedure should be put in place for dealing with complaints that may be made against a Member of this House or the other House under this legislation when enacted. The Minister said we cannot stifle public debate and I agree with him, but a procedure must be in place for dealing with such complaints and under the rules of natural justice an appeals mechanism must also be put in place to enable the subject of the complaint the right to appeal against the complaint made. That is important. Complaints have been made against a number of Members on all sides of the House in the recent past and they have appeared unsubstantiated in the public press and been left hanging. That can do terrible damage. If we put in place a mechanism for investigating complaints made against Members, that should be the mechanism - it should be not be anywhere else. Political charges back and forth about policy and other issues are a different matter, but a mechanism should be put in place for investigating personal charges that, for instance, appear in the press. We should be able to establish where such charges originated, as they can do irreparable damage. The reporting standards in the courts were mentioned. The same reporting standards should apply to cases in which the Standards in Public Office Commission will be involved. It is important that confidentiality is respected in such a complaints procedure. If a complaint was made against a Member to the commission, confidentiality should surround that until the commission would have issued findings as rumour and innuendo can destroy or do terrible damage to somebody in this profession. Previous speakers raised the issue of the number of Members present in the House for various debates. There are only three Members in the Chamber on this Thursday afternoon and only two Members were present earlier. That adds to public cynicism about the Dáil and what we do here. I do not know what the answer is, but proposals are before Government to reform how we do our business and they need to be acted on. I did not read of any provision in the Bill for checking declarations of interest. If a Member or a judge makes a declaration of interest, is that checked? If a Member said he was a director of a number of companies, is that checked or audited? I do not think it is. It might be useful to investigate the possibility of randomly checking them to ensure everyone is telling the truth and not hiding anything. I am not sure who should be responsible for that, but it should be done. 2 o'clock The requirement to make declarations of interests stems from the interaction between politics and business, which we need to separate. Picking up on what my colleague, Deputy Bradford, said, it goes back to the notion of how politics is funded. There is no doubt if someone donates more than £50 or £100 to a Member of this House, that Member will probably be more sympathetic to the donor than to the person who did not give money and, the larger the sum of money, the more sympathy. That is human nature. When our party leader took over, the first thing he said was that he would get rid of corporate donations. It would solve many problems if there were no corporate donations to political parties. I call on the Government parties to take on board that aspect which might eliminate the need for much of this legislation. At the end of the day, we are all answerable to the law of the land. If people want to take money under the table, so to speak, they will take it no matter what happens. There will always be corruption. There is a perception that business and politics are too closely allied. The only way to put an end to that perception is to take the bull by the horns and eliminate large corporate donations. The size of donations should be limited. My colleagues spoke about church gate collections, with which I have a problem. This is not how political parties should collect money in this day and age because it gives a very bad image. They should be funded from the Exchequer. There is plenty money available for this. It would free up Members' energies to get down to what we should do, that is, legislate in this House. Resources to committees should be increased. Due to lack of resources, the Oireachtas Committee on Public Enterprise and Transport finds it very difficult to hold meetings with regard to huge issues in the area of public enterprise. It is tied up with the investigation of the sub-committee. The other committees are also stymied in their work as the resources are not available. Just because two committees are carrying out investigative work outside their normal work, everything else must stop. This leads one to ask if the other work of the committees is necessary. Can it be dispensed with just like that? I call on the Government to ensure that committees are properly resourced, which is very important. Anonymous complaints were mentioned during the course of the debate, and this issue which must be borne in mind. I welcome the mechanism whereby an inquiry officer will do the initial groundwork up to a certain point, but we should not dismiss anonymous complaints. Confidentiality is very important, particularly with regard to anonymous complaints and they should be investigated initially because people might be genuinely afraid to put their names to something. When up and running properly, the commission should eliminate the need for further tribunals and such investigations, including investigations with which committees of this House might deal, which would be a good thing. I am not decrying the work of the tribunals, which are important, necessary and doing a good job. However, the commission, by virtue of its very existence, would deter people from getting involved in the alleged activities which are being investigated currently by the tribunals. It would probably be able to do a great deal of the investigative work at a lower level than the tribunals, even though it will have the same power as the tribunals. Section 14 needs to be looked at again. It reads, ".... a person who gives evidence before a Committee or the Commission ..... shall not be entitled to refuse to answer any question .... on the ground that his or her answer or the document might incriminate him or her." When replying, I would like the Minister of State to clarify what this section means. It works both ways. If a person can or cannot answer questions before the committee, how would that influence something that might or might not happen in the future? Hardly a week goes by that we do not set up an authority. The much maligned National Roads Authority has been mentioned here from time to time. If I ask a question in this House on the issue, I receive a reply from the Ceann Comhairle's office stating that the Minister is not responsible to the Dáil in regard to that issue, therefore I cannot get a reply. We set up more and more of these authorities, including the railway procurement authority which will be set up shortly. The list goes on and on. We should enact legislation making these authorities answerable through parliamentary question in the Dáil. If a Members puts down a question to a Minister seeking information pertaining to these State authorities, that information should be provided. We should differentiate between, on the one hand, the Minister being responsible for these authorities and interfering in their work and, on the other, the Minister giving information on the floor of this House about what the authorities are doing. That is important because it means this Chamber is handing over a great deal of power to these authorities, and they must be accountable. I am aware they are accountable to committees of the House but it would be better if they were accountable to this Chamber. Members were elected to govern the people and we live in a liberal democracy. We have a limited government, so to speak. The Government's job is to protect the citizens from the rulers, which is what our democracy is about. While capitalism is an integral part of the liberal democratic mix, we must separate it and make sure that the checks and balances exist. For that reason I welcome the Bill. I would like a consolidated framework of legislation in this area and a simplified booklet for any prospective candidates so that they will know what is required of them if they stand for election. Anyone in the State should be able to obtain such a booklet prior to an election. I believe we are moving from government to governance. Legislation is being passed in Europe and we are setting up local government structures, some of which are not elected, therefore we need to be careful. This debate will probably help the development of politics in the future. |
| Mr. U. Burke: I
welcome the opportunity to contribute to this Bill. As a new Member of
this House, I find it demoralising and humiliating that we have spent
so much of the time of this House hassling between ourselves as
Members, and between Government and Opposition just to prove against
one another the doings of various Members elected to do a job. The
issue being raised by the public now is how certain Members of these
Houses have behaved in public office over the years.
On one of my first days here I saw former Minister, Mr. Ray Burke, literally on the verge of tears. Not knowing the background I felt that somebody should come to his assistance because of the way in which he delivered what I believed, mistakenly I admit now, was the real truth about some of the activities he was involved in down the years. Other revelations were made since about other Members and Ministers. It makes no difference whether the revelations are about Government or Opposition as they reflect on all of us. I have been out in support of by-election candidates and I have found, whether in Dublin, Tipperary or Limerick, the attitude that politicians are all the same. That is a trag |