Laya Healthcare Frustrated

STATEMENT FROM LAYA HEALTHCARE

Laya healthcare is frustrated by, and disappointed at, the ill-considered way in which the Government is rushing through its proposal for a revised new Risk Equalisation Bill – Health Insurance (Amendment) Bill 2012 without any proper consultation with health insurance providers.

The focus for the Department of Health should be on affordability and the consumer’s ability to pay. Since February 2012, when the Government first announced plans to revise the Bill, laya healthcare has made several attempts – all futile – to meet with the Department of Health in an effort to review the legislation and offer constructive feedback on proposed amendments and solutions. Despite promises to the contrary, all efforts to engage have unfortunately been spurned or ignored.

Along with a number of other key stakeholders, laya healthcare has been invited to attend a debriefing session in the Department of Health tomorrow, Friday, October 19th. The consultation process has been requested by laya healthcare for some time now. Therefore, it was expected that this session would provide an opportunity for the interested parties to review and provide feedback on the draft Bill prior to its publication. In the meantime, the Department announced its intention to publish the Bill prior to the debriefing session on Friday, negating the chance of any meaningful consultation at this late stage.

Laya healthcare is currently working through the detail of the Bill and reviewing the exact financial implications for consumers. However, at first glance the following points are already clear:

1.    The ability of consumers to avail of new, innovative benefits has been squashed by the new Bill as insurers will only be permitted to alter benefits across its most popular range of schemes, once a year. This will stifle competition in the market and will impact negatively on consumers in terms of genuine choice and affordability.

2.    The way in which the Bill was introduced is extremely heavy handed given that it restricts the private health insurers’ ability to introduce innovative new products to the market. The private health insurers only received sight of the draft legislation on October 17th, the very same day that they were required to give notice to the HIA of all products for sale from January 1st, 2013. This is without full visibility on how risk equalisation will be rolled out.

3.    As the system currently stands, consumers are discouraged from moving provider mid year as the health levy must be paid regardless of movement within the market. This new bill has done nothing to address this. Laya healthcare has a range of innovative benefits in the pipeline which will be welcomed by consumers but will be restricted from introducing these under the new Bill.  

4.    The proposed new regime will be much more complex and expensive for the HIA to operate and will require significantly more resources. This will ultimately impact on the cost of the health levy which will be passed on in rising costs to the consumer.

5.    It would appear that this bill is incentivising the market based on the number of nights a person occupies a hospital bed. This will drive inefficiency and increase the cost of claims by encouraging patients to stay in hospital longer than is necessary.

Dónal Clancy, Managing Director, laya healthcare said: “As the second largest player in the private health insurance market, we represent more than 450,000 members who tell us they are extremely worried about the spiralling cost of private health insurance. Reforming the private health insurance sector must include incentivising younger people to enter the market with a standard product or Universal Health Insurance as its heart. For some time, we have been asking Minister Reilly and his officials at the Department of Health to engage in open and meaningful consultation with all key industry stakeholders to move this process forward. Regrettably for consumers, these requests have fallen on deaf ears”.

“Affordability is the number one reason for people exiting the market and it’s primarily young people with families who are cancelling their policies. This is a disaster for the future of the healthcare industry as young people are critical to helping underpin the principle of Community Rating. This principle means that older people should not be penalised by paying more for their private health insurance than younger people in the market. Furthermore, it’s a vicious circle when more people choose to opt out of private health insurance they merely fall back into an already overstretched and overburdened public health system. One of the better ways to make improvements is to incentivise young people to enter or stay in the market”.

“Unless we seriously tackle the cost spiral affecting consumers in the market, which is primarily being driven by an unfair health levy or stealth tax, and look at ways of reducing the cost of claims, we risk facing a serious meltdown of our healthcare system” concluded Mr. Clancy.