In an earlier Valuewalk article, we examined how the Irish government was allowing the cost of health insurance in Ireland to spiral out of control, while simultaneously introducing legislation that was hampering competition in the sector. Now it seems ‘Obamacare’, or the Affordable Care Act in the US, signed into law by President Obama, may be about to cross the Atlantic.
Ireland: Replicating instead of revolutionising
Minister for Health, Dr. James Reilly and his Department officials have drawn up a White Paper on Universal Health Insurance (UHI) under which everyone in Ireland would be required to have private health insurance for at least standard level of cover by one of a number of competing insurance companies. Obamacare in the US is very similar. Citizens there are required to buy health insurance from health insurance exchanges. Those who don’t take out a policy pay a penalty. Under the Irish proposals, those who refuse to buy mandatory cover would have the costs deducted from their earnings or benefits.
Under the Irish proposals, citizens could also buy supplementary health cover for items not covered by the standard package, such as private hospital rooms – also virtually identical to Obamacare.
We have no idea how it will work…
Details on implementation and costs are still very sketchy. There is disagreement among ministers on how it will work and the exact composition of the standard package for Irish citizens will not be determined until after a comprehensive consultation process. However, private health insurance costs across Ireland have surged since 2012. Recently, some health insurance companies announced price rises of 20% or more. So, it’s hardly surprising that more and more people, especially, younger people are opting out of health insurance altogether. A recent survey found that 51% of younger people in Ireland said that cost was a barrier to healthcare – the fourth highest in Europe.
Despite that, Reilly says that it’s the current system that’s unaffordable:
“Without reform, taxes will go up and services will come down. It is inevitable. With the right kind of reform, however, we can lower costs even as we improve services, and deliver better, safer outcomes for patients.”
Ironically, he added that the current system had given Ireland “one of the highest priced, most expensive systems in the developed world – once you adjust for the fact that Ireland’s population is still much younger than most other developed countries. We cannot afford this broken health system. We must reform it.”
Under the new proposals, he said that no one would be denied care because they couldn’t afford it:
“Parents are not forced to choose between bringing a sick child to the GP or paying the electricity bill.”
…but we know who will pay
However, critics argue that with healthcare premiums being taken at source, hard pressed household will have no money left for essentials such as heating and food. Indeed, with the lower paid Irish workers already stretched to the limit with a raft of new taxes under the present government, it is very difficult to understand where they will find the cash to pay for mandatory healthcare – especially when it’s thought the final figure could be around €1600 per year for an adult.
Some critics are already saying that the proposed system is unworkable. The Irish Medical Organisation (IMO) said the government was set on introducing a system that would turn healthcare into a commodity, instead of a service:
“Insurance companies will be making decisions based solely on profit, not on patient care. It is only the wealthier that will benefit in a system where there is a standard basket of healthcare with added benefits being available for purchase by those who can afford it.”
Meanwhile, the trade union, Impact, warned the government’s plan would place a ‘universal financial burden on families with no guarantee of universal access to healthcare’.
Impact’s national secretary, Louise O’Donnell said:
“The experience in Holland, which has a similar funding model to that proposed by the government, has been a continuing rise in the price of compulsory insurance, coupled with increasing restrictions on the health services covered.”
Despite that, Dr. Reilly and Taoiseach Enda Kenny are pressing ahead with the introduction of Universal Health Insurance by 2019. If they’re successful, then ‘one of the highest priced, most expensive systems in the world’ is about to get even more expensive for the working class of Ireland.