Health: Risk Equalisation and €125 million insurance payments

The Government has approved the text of a Bill for a new Risk
Equalisation scheme in the private health insurance market, to apply
from 1 January next. The Health Insurance (Amendment) Bill 2012, which
will be published tomorrow, delivers on the Government’s commitment to
introduce a strengthened Risk Equalisation Scheme to replace the
current Interim Scheme that expires on 31 December.

Risk Equalisation is designed to take account of differences in health
insurers’ costs that arise due to the age or health of their
customers. It protects our system of community rating, whereby older
and sicker people can buy health insurance for the same price as
younger and healthier customers.

The Bill will be enacted by the end of this year, in advance of its
implementation from 1 January 2013.

€125 million insurance payments

Minister Reilly has welcomed progress on the agreement that has been
reached between his Department and private health insurers to an
accelerated payment of some €125m to publicly funded hospitals in

The system involves improved cash flow between now and the end of the
year, and will provide much needed funds for hospitals in the coming
months to the end of December.

The money is a once off payment in respect of private patients who
have already been treated in publicly funded hospitals, but where the
detailed claims have not yet been received by insurers. The effect of
the €125 million will be to reduce the overrun in the HSE.

The legal details are now being worked out between the HSE, voluntary
hospitals and insurers involved – Aviva Health, Laya Healthcare and
the VHI. The funds from the agreement will come on stream in the next
few weeks.