{"id":10297,"date":"2022-07-08T15:04:15","date_gmt":"2022-07-08T15:04:15","guid":{"rendered":"http:\/\/legalblog.ie\/health-insurance-background\/"},"modified":"2024-02-25T22:04:43","modified_gmt":"2024-02-25T22:04:43","slug":"health-insurance-background","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/health-insurance-background\/","title":{"rendered":"Insurance Background"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#Pre-VHI\" title=\"Pre-VHI\">Pre-VHI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#VHI_Established\" title=\"VHI Established\">VHI Established<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#VHI_to_1970\" title=\"VHI to 1970\">VHI to 1970<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#VHI_1970s\" title=\"VHI 1970s\">VHI 1970s<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#Private_Hospitals\" title=\"Private Hospitals\">Private Hospitals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#VHI_1980-_1994\" title=\"VHI 1980- 1994\">VHI 1980- 1994<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#EU_Liberalisation\" title=\"EU Liberalisation\">EU Liberalisation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/health-insurance-background\/#Health_Insurance_Authority\" title=\"Health Insurance Authority\">Health Insurance Authority<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Pre-VHI\"><\/span>Pre-VHI<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Private health insurance existed prior to the establishment of the VHI but was limited in scope.\u00a0 Some private medical insurance schemes run into financial difficulties.<\/p>\n<p>The Health Act 1953 established three groups of persons entitled to health services.\u00a0 Persons unable to provide health services for themselves and their dependents are entitled to access health services free of charge.<\/p>\n<p>A second group was entitled to more limited services free of charge or at a modest charge.\u00a0 The third group, estimated to comprise about 15 per cent of the population, could obtain free public hospital coverage only if they could show that meeting the cost would cause undue hardship in the circumstances.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"VHI_Established\"><\/span>VHI Established<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In 1955, an advisory committee was established to examine the feasibility of voluntary private health insurance.\u00a0 The committee advised that a scheme of voluntary health insurance against the cost of hospital maintenance, medical, surgical and maternity services would be practical.<\/p>\n<p>It would not be practical to include general practitioner services nor dental services.\u00a0 It was recommended that the scheme be administered by a State body.<\/p>\n<p>The Finance Act 1955 introduced income tax relief on contributions to voluntary health insurance policies.<\/p>\n<p>The Voluntary Health Insurance Act 1957 provided for the establishment of the VHI. The legislation granted the VHI an effective monopoly on health insurance schemes.\u00a0\u00a0 Limited schemes could be provided by some existing societies and trade unions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"VHI_to_1970\"><\/span>VHI to 1970<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The VHI\u2019s number of policyholders increased steadily from approximately 25,000 in the first year of operations, exceeding half a million in 1970.<\/p>\n<p>Initially, it offered three schemes, A, B and C, at varying annual subscriptions.\u00a0 Group subscriptions were offered.\u00a0 Group membership schemes were promoted heavily, both to individual businesses and to whole sectors of employment.<\/p>\n<p>In the 1960s, expansions in the level of cover were offered with extended hospital maintenance cover. Gradually, the cost of hospital maintenance was added to the basic cover, plugging a significant gap in cover. There was an increase in the upper age level from 75 to 80.<\/p>\n<p>In 1967, coverage was extended to prescribed drugs and medicines outside hospitals, expenses for newborn children, home nursing, and improved maternity benefits.\u00a0 The drugs and medicines scheme was expensive and was withdrawn in the 1980s.<\/p>\n<p>The maximum hospital cover was increased from 30 to 40 weeks in 1967.\u00a0 The upper age limit for the cover was removed. \u00a0Restrictions on cover for pre-existing illnesses were modified after five years of membership and removed after 10 years.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"VHI_1970s\"><\/span>VHI 1970s<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The nature of the cover offered changed and developed further through the 1970s and &#8217;80s.\u00a0 In the 1970s, the hospital scheme covered normal hospital coverage, and the home scheme covered drugs, medicines, home nursing, and medical appliances.<\/p>\n<p>In 1979, the eligibility for public hospital services under the Health legislation was broadened so that free hospital maintenance and treatment were available for all except those in upper-income groups.\u00a0 The latter groups were required to pay professional fees created in pubic wards.<\/p>\n<p>In response to the broadening of statutory hospital coverage, the VHI revised its plans A, B, and C.\u00a0 A flat cover was available, together with the possibility of purchasing additional cover.<\/p>\n<p>Membership exceeded one million by 1983.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Private_Hospitals\"><\/span>Private Hospitals<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In the late 1970s, a number of private hospitals were founded. Many other older private hospitals existed, which provided more limited services.\u00a0 Vincent&#8217;s Private Hospital was founded by the Religious Sisters of Charity in the mid-1970s.<\/p>\n<p>By 1986, there were three new private hospitals.\u00a0 The Galvia in Galway, Blackrock Clinic and the Mater Private Hospital.\u00a0 VHI&#8217;s most popular B plan provided less than half the coverage in these hospitals, and level D and E plans were created for wider coverage.<\/p>\n<p>The Finance Act 2001 encouraged the building of private hospitals. Tax allowances were made to incentivise the construction of such hospitals, although, in practice, few were built.\u00a0 Concerns were raised that the great availability of beds would not ease pressure on public hospitals but would generally increase the level of demand for beds.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"VHI_1980-_1994\"><\/span>VHI 1980- 1994<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The costs of hospital services were substantially increased due to financial pressures in the mid-1980s.\u00a0 The charges for private and semi-private rooms in public hospitals more than doubled. \u00a0Wider availability and more modern technologies and facilities pushed costs upwards.<\/p>\n<p>The VHI board, as a state-controlled company, was limited in permissible cost increases, notwithstanding the enormous increase in hospital charges. By the late 1980s, the VHI faced a significant financial deficit.\u00a0 The Department of Health commissioned a study on the VHI&#8217;s future in 1988.\u00a0 It identified the limited access to private funding and limits on government funding as problems.<\/p>\n<p>Subscription increases, and benefit reductions were proposed and undertaken together with a new agreement with private hospitals. The prescribed medicine scheme was withdrawn.\u00a0 Costs were reduced by agreement with private hospitals providing for direct reimbursement by VHI.\u00a0 The financial position of VHI improved and was solvent by the beginning of the 1990s.<\/p>\n<p>The hospital sector was becoming increasingly commercialised in the 1990s.\u00a0 Religious orders withdrew from private hospitals due to falling numbers of members.\u00a0 At this stage, half of the country&#8217;s \u201cprivate\u201d beds were in private and semi-private hospitals and half in public hospitals.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"EU_Liberalisation\"><\/span>EU Liberalisation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Health Insurance Act 1994 followed EU requirements to open up competition in state-owned sectors. BUPA Ireland, a UK insurer, established itself in the Irish market in 1996.<\/p>\n<p>The legislation required health insurers to apply the principles of open enrolment community rating, lifetime cover and minimum scales of benefit.\u00a0 Community rating requires that the same level of premium and cover applied regardless of age and health status.\u00a0 The risk equalisation scheme required companies with a higher proportion of younger, less risky patients to transfer funds to companies with older patients with higher risk categories (largely the VHI).<\/p>\n<p>A government White Paper on health insurance recommended full risk equalisation and the incorporation of VHI Healthcare as a body with full commercial freedom.\u00a0 It recommended an investment of \u20ac60 million by the State in VHI Healthcare. The Health Insurance Amendment Act 2001 implemented the proposals in relation to commercial freedom and community rating.<\/p>\n<p>The legislation allowed for coverage of GP, dental, outpatient, and ancillary services.\u00a0 It provided for risk equalisation with a three-year exemption from risk equalisation for new insurers.\u00a0 It provided for a late entry premium, which could be charged to persons taking out health insurance for the first time after the age of 35 or with a significant lapse in coverage. It permitted reduced premiums for persons under 23 years of age in full-time education.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Health_Insurance_Authority\"><\/span>Health Insurance Authority<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The legislation established the Health Insurance Authority. It is independent in the exercise of its function.\u00a0 It monitors the health insurance market and advises the Department of Health on matters relating to health insurance.<\/p>\n<p>The Authority monitors the operation of legislation and enforces compliance.\u00a0 It carries out certain functions in relation to health insurance levies and age-related tax credits, as well as the risk equalisation scheme.<\/p>\n<p>It may take action to increase public awareness of their rights as consumers of health insurance. It maintains statutory registers of health benefit undertakings and health insurance contracts.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10297\" data-postid=\"10297\" class=\"themify_builder_content themify_builder_content-10297 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Pre-VHI Private health insurance existed prior to the establishment of the VHI but was limited in scope.\u00a0 Some private medical insurance schemes run into financial difficulties. The Health Act 1953 established three groups of persons entitled to health services.\u00a0 Persons unable to provide health services for themselves and their dependents are entitled to access health [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[137],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10297"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10297"}],"version-history":[{"count":7,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10297\/revisions"}],"predecessor-version":[{"id":32324,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10297\/revisions\/32324"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}