In the United States, citizens without health insurance will soon pay a fine for their lack of coverage. Across the Atlantic Ocean, Ireland is also considering introducing a penalty upon health insurance holders: a new report from the Irish Department of Health has recommended that anyone over the age of 30 taking out private health insurance for the first time should pay a penalty.
This age-based fine would, according to the independent report, control costs and lower premiums in Ireland’s private health insurance market. Since 2008, the Health Insurance Authority has seen more and more private claims, with premiums steadily increasing. The Department of Health report points out that this rise in premiums is connected to a rise in people over the age of 60 who choose to buy private health insurance. In 2003, just 13.3 percent of private insurance customers were over 60; by 2013, nearly 20 percent of customers were 60 years and older, demonstrating a yearly increase of 1 percent starting in 2009.
If this trend continues, and more and more over-60s join the private insurance system every year, insurers may find it increasingly difficult to keep costs low. Middle-aged health insurance users are on the whole more expensive: requiring consistent care for a chronic health condition such as heart disease or diabetes, or seeking treatment for age-related conditions such as glaucoma or arthritis.
In order to keep costs and premiums reasonable, the report recommends that measures be introduced in Ireland to fine private insurance holders who join for the first time once they are over 30. People interested in private health insurance would therefore have an incentive to become a customer at a younger age, giving the Irish health insurance market a better ‘lifetime community rating,’ meaning a wider range of ages paying into the market and lower costs for everyone. The report also encourages private insurance companies to offer joining incentives to the 18 to 29 age group.
Ireland is an interesting example of a nation where public, government-funded health insurance exists, and yet many people still choose to purchase private insurance. A Voluntary Health Insurance board has been in place in Ireland since 1957, and at the moment there are four private health insurance companies active in the country. Nearly 50 percent of Ireland’s population (more than 2 million people) opt to buy private insurance, despite the option of free or low-cost access to public health care.
Private health insurance companies in Ireland say that by choosing private insurance, people can reduce waiting times for treatments, choose their own medical consultants and have the option of receiving care in a private or public hospital. Private insurance can also offer patients coverage for additional health services such as a maternity consultation with a pediatric specialist; psychiatric care; and coverage when traveling overseas. According to the Irish Health Authority, more than half of private insurance holders see their coverage as a necessity rather than a luxury, although this number has fallen in recent years possibly due to the economic recession and less discretionary income.
But even as private health care companies work to lower their own costs, some people in Ireland feel that private insurance should be done away with altogether. At the moment private care is subsidized by public tax money, but only accessible to those people that further pay into the private insurance system by purchasing coverage. Groups such as the Irish political party Sinn Fein have suggested that Ireland create a new, universal health care system; having the government contribute more money toward universal coverage and taking money out of the private system.
Indeed, Ireland’s two-tier organization of national health care has been scrutinized, and often criticized, for a number of years. In Ireland, public and private health care are intertwined: so-called private care was for a long time delivered by the state, and even now many private medical services are provided by publicly paid doctors working in public hospitals. The fact that nearly half the population of Ireland feels the need to purchase private insurance demonstrates the complicated and symbiotic nature of public and private care within the country.
In the recent Department of Health report on private health insurance, report writers conclude that if costs and premiums cannot be reduced, the trend of private coverage may fall and more and more Irish citizens may choose to rely solely upon public care instead. If private care users decrease, and especially if this decrease is seen amongst younger, healthier users, the private insurance system in Ireland may prove unsustainable. Report writers advise that imposing penalties on first-time private insurance users over the age of 30 will encourage younger people to purchase insurance, but it is also possible that such fines will discourage 30-somethings from buying private insurance altogether.
As Irish Minister for Health Dr. James Reilly considers the report, the Minister will no doubt need to decide how to keep Ireland’s private health system viable in the face of a tough economy and mounting criticism of the system’s fairness. Private insurance can offer more choice and shorter waiting times to patients, but public health care costs far less and, if groups like Sinn Fein have their way, may be the ultimate future of medical care in Ireland.