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Ireland: The Ambiguous Role of the Health Insurance Market

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This chapter addresses the very peculiar role of the private health insurance (PHI) market in Ireland. Because the public statutory system is not actually universal, the legislation has strongly regulated the PHI market to make it play a general interest role in healthcare coverage. This was achieved through an original transposition of the 1992 Insurance directive, in which Irish legislation combined market rules and the interests of the common good. Nevertheless, it involved serious legal issues that led to EU law and national public policy being accommodated. In addition, the economic and financial crisis seriously challenged the two-tier Irish Healthcare system, as the proportion of people faced with unaffordable private health expenditure significantly increased. The chapter finally explores the recent Irish reform plan that reconsiders the question of universal coverage. This might lead to a fundamental transformation of the role of PHI.

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  1. 1.

    As regards drug prescriptions, people who are not entitled to the Medical Card would pay a monthly capped amount (€144 per month maximum) if they sign up for the Drugs Payment Scheme, which is a kind a public insurance; above this amount, they are reimbursed by the scheme.

  2. 2.

    The Medical Card for people more than 70 years of age is currently means-tested, though the threshold for this category is higher than the usual one.

  3. 3.

    Since the nineteenth century, Ireland had a tradition of Catholic Church-founded and controlled hospitals. They were formerly funded by charitable endowments augmented by grants from parliament and, from 1930, by a national lottery. In the modern era, they have been funded by taxation and private health insurance (Wren and Connolly 2019).

  4. 4.

    This is no longer the case, as nowadays, VHI comes mainly in the form of hospital plans providing access to semi-private or private rooms in public and private hospitals (Turner 2016).

  5. 5.

    In Ireland, the purchase of VHI is supported by the Government through a system of tax relief: the Health Insurance Tax Credit reduces the amount of the health insurance premium paid by people. In general, the lower the household income, the higher the credit.

  6. 6.

    The RES was discussed through a consultation process, and an independent advisory group on risk equalization was tasked with preparing a White Paper on Private Health Insurance which was adopted by the Department of Health and Children in 1999. In this White Paper, it was decided to preserve the principle of community rating and the advisory group also concluded that risk equalization was necessary in a community-rated market. Nevertheless, the Government considered that the RES as it was designed could lead to uncontrolled costs and price increases and did not reward efficient insurers. The Irish Government thought that “additional competition has the potential to mitigate price increase pressure by, in particular, encouraging insurers to adopt cost containment measures.” It finally decided that the RES should be amended.

  7. 7.

    Insurers were required to file returns every six months. Upon the basis of these returns, the HIA was supposed to assess the risk profiles of insurers and recommend to the Minister for Health and Children whether payments should be made under the scheme. New entrants were provided a limited opportunity to opt out of the scheme for three years, together with a phase-in period during which only 50% of any payments would be required.

  8. 8.

    In 2001, VHI Healthcare’s market share was 85% of which 9% for people more than 65 years of age (and 23% between 49 and 64 years); BUPA’s market share was 8% of which 4% for people more than 65 years of age (and 6% between 49 and 64 years).

  9. 9.

    About the legal issues, see Sect. 2.

  10. 10.

    In 2009, this levy was €160 for adults and €53 for children.

  11. 11.

    In 2012, the Irish authorities notified the Commission of the new 2013 RES. The Commission authorized the 2013 RES by decision of February 20, 2013.

  12. 12.

    ECJ July 24, 2003, Case C-280/00, Altmark Trans GmbH and Regierungspräsidium Magdeburg/Nahverkehersgesellschaft Altmark GmbH.

  13. 13.

    Communication from the Commission: European Framework for State aid in the form of public service compensation, OJ C 8, 11.1.2012, p. 15–22.

  14. 14.

    At this time, it was estimated that VHI healthcare covered 20 times more people aged over 80 years than BUPA.

  15. 15.

    Irish Supreme Court, BUPA Ireland v Health Insurance Authority, July 16, 2008, IESC 42.

  16. 16.

    Decision C (2003) 1322 final, of May 13, 2003, State aid N 46/2003-Ireland.

  17. 17.

    The notion of SGEI was introduced into the European Treaties at article 86 of the EC Treaty (currently article 106§2 of the Treaty on the Functioning of the European Union (TFUE)), which states that “Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.”

  18. 18.

    Court of First Instance of the European Communities, February 12, 2008, Case T-289:03, BUPA and others v Commission.

  19. 19.

    For an in-depth study of the BUPA case, see in particular Sauter (2008); also Biondi (2008).

  20. 20.

    ECJ, November 22, 2001, Case C-297/15, Ferring SA versus Agence centrale des organismes de sécurité sociale (ACOSS) ; ECJ, July 24, 2003, Case C-280/00, Altmark Trans GmbH and Regierungspräsidium Magdeburg versus Nahverkehrsgesellschaft Altmark GmbH.

  21. 21.

    HIA, Competition in the Irish Private Health Insurance Market, Report to the Minister for Health and Children, January 2007.

  22. 22.

    ECJ, case C-82/10, Commission versus Ireland, September 29, 2011.

  23. 23.

    Public spending grew by 8.4% p.a. from 1995 to 2000 and by 11.2% p.a. from 2000 to 2008 (Lynch 2018). Between 1997 and 2007, the health budget quadrupled, making up for decades of under-spending in health (Burke et al. 2014).

  24. 24.

    In 2017, Ireland devoted 7.1% of its GDP to healthcare, below the EU28 average of 9.6%. However, Ireland was in the 5th place in 2017 in terms of health expenditure per capita, between Austria and the Netherlands and well above the EU average (OECD/European Union 2018).

  25. 25.

    The drug reimbursement deductible was raised. In-patient, out-patient and emergency charges in hospital were also increased (OECD 2017). The statutory coverage of primary care for wealthy individuals more than 70 years of age was also removed (Mazeikaite et al. 2018).

  26. 26.

    There were over 12,000 fewer Health Service Executive (HSE) staff in December 2013 than there were at the height of public health sector employment in 2007 (Burke et al. 2014). The total number of whole time equivalent (WTE) staff employed dropped almost 10% between 2009 and 2013 (Department of Health 2018).

  27. 27.

    Among them, “the introduction of a unique patient identifier, the enhancement of primary care reimbursement services, the expansion of general practitioners’ (GPs) after-hours services, fuller cost recovery of the costs of treating private patients in public hospitals, and the introduction of a financing mechanism based on the ‘money-follows-the-patient (MFTP) (…) The rationalisation of the hospital network can be speeded up and the drugs bill reduced further’” (European Commission 2013a, p. 21).

  28. 28.

    33% of the population had a medical card in December 2017, compared to 40% in 2012. The percentage of people with a medical card has decreased among the older and younger age groups. The decrease among young people could be partly due to the introduction of free GP visit cards for children less than 6 years of age from 2015 (Department of Health 2018).

  29. 29.

    Out-of-pocket payments are high because co-payments are applied on a broad range of services, including primary care.

  30. 30.

    Due to the economic crisis, Irish health spending coming from private sources grew from 21% in 2008 to 30% in 2015 (Turner 2018a).

  31. 31.

    There has been an increase in the number of products on the PHI market, among them contracts including excesses and co-payments and special high co-payments for knee and hip replacements as well as for cataract removal. The latter is considered as an attempt to dissuade older people from purchasing those particular products. Excesses and co-payments are not allowed by law for private treatment in public hospitals (Lynch 2018).

  32. 32.

    Only a small number of policies provide partial reimbursement of certain primary care expenses, such as GP visits and physiotherapy.

  33. 33.

    The different payment methods for public and private patients incentivise “two-tier” access to hospital care. Hospitals are funded by a block grant and consultants receive a salary for treating public patients. For the treatment of private patients, hospitals receive per diem charges and consultants a fee-for-service, providing an incentive for hospitals to treat more private patients whom waiting time is shorter (Connolly and Wren 2017).

  34. 34.

    The significant change was that people who decided to waive their right to be treated publicly (and thus be private patients) would be liable to a minimum daily charge of €813 for each night in most acute public hospitals, irrespective of the designation of the bed that they occupied (€407 for a day case and €1000 for a single room per night). The effect of this change on claims appears to have occurred with a time lag with most of the increasing effect on claims occurring in 2015 and some continuing effect in 2016 (The Health Insurance Authority 2018).

  35. 35.

    The average premium increased by 10% in 2013 and 4% in 2014 (The Health Insurance Authority 2017).

  36. 36.

    In addition to those insured with in-patient plans, there were 106,000 insured with products solely providing out-patient benefits or health insurance cash plans (The Health Insurance Authority 2018).

  37. 37.

    In December 2008, the market peaked at almost 2.3 million; it decreased to 2,025,000 million in December 2014 (The Health Insurance Authority 2018).

  38. 38.

    The net premiums are reduced by income tax relief, which is 20% of the gross premium up to a maximum of €200 and which the insurers receive directly from the Revenue Commissioners (The Health Insurance Authority, 2018).

  39. 39.

    “This shift away from the current hospital-centric model will enable our system to better respond to the challenge of chronic disease management, to provide care closer to home for patients, to deliver better value-for-money and to maintain a strong focus on health promotion and public health” (Sláintecare Report 2017, p. 12).

  40. 40.

    The cost of universal GP care is estimated at €455 million over five years. The cost of universal primary care is estimated at €265.6 million over the first five years of the plan (Sláintecare Report 2017).

  41. 41.

    The private income currently accruing to public hospitals is to be replaced by public money.


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Martin, P., Turquet, P. (2021). Ireland: The Ambiguous Role of the Health Insurance Market. In: Benoît, C., Del Sol, M., Martin, P. (eds) Private Health Insurance and the European Union. Palgrave Macmillan, Cham.

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