The Insurance Ireland Health Insurance Council wishes to clarify some figures that have been quoted re: the impact of changes to the tax relief on private health insurance premiums announced in Budget 2014. We wish to confirm that 9 in 10 adult private health insurance customers and over 90% of plans will be affected by this change.  The claim by Government that this will only affect “gold-plated policies” is simply incorrect. 

This can clearly be seen if you take the industry average premium – a gross rate of €1500. Prior to the change, the net cost of this for an adult was €1200 but following the change, the cost is now €1300 – an increase of €100 per adult. Furthermore, the Council also challenges the Government’s estimate of those affected – approximately 577,000 policy holders – believing the wider impact to be far greater. According to its own industry data, the Council estimates this figure to be 90%, or 9 in 10 adults with private health insurance. 

This fundamental miscalculation regarding the number of customers impacted will exacerbate the issues of sustainability and affordability at a time when the market is already significantly contracting.

Michael Horan, Spokesperson for the Insurance Ireland Health Insurance Council, said: “The Government has committed to a fundamental reform of the healthcare sector in Ireland through the introduction of a Universal Health Insurance system.  We believe the measures introduced in Budget 2014 will seriously jeopardise this.  The €127 million reduction in tax relief combined with the public bed charges of €30million means that an additional €157million needs to be raised by the end of 2014. This will ultimately have to be funded by customers through their premiums. We urgently call on the Minister to review this measure and consult with health insurers on the issue and if the intention was to address ‘gold-plating’ we call for a revision of the cap.”

ENDS

Notes to Editors: 

1.   As the voice of insurance actively promoting the highest standards, Insurance Ireland represents 95% of the domestic market and 70% of Ireland’s international life insurance market. This business generates €25bn in premium income (domestic and overseas), employs 15,000 people, with thousands more in ancillary services and contributes over    €1.1 billion in tax to the Irish exchequer.   

2.   Insurance Ireland, which is the representative body for insurance companies in Ireland, was previously known as the Irish Insurance Federation.

3.   See table below of how the industry average premium is affected by the cap on tax relief: