Competition in the Irish Private Health Insurance Market

• 2001: The Health Insurance Authority was established and took
over the sectoral regulatory role for health insurance from the
Department of Health and Children. Amendments to the 1994
Health Insurance Act were enacted.
• 2001: Medical cards were made available to everyone over the age
of 70.
• 2003: A new Risk Equalisation Scheme was introduced by Statutory
Instrument.
• 2004: VIVAS Health entered the health insurance market.
• 2005: Decision to commence risk equalisation payments. 6
• 2006: BUPA loses legal challenge in the High Court on risk
equalisation and announces that it is commencing its withdrawal
from the Irish market.
Demand for Private Health Insurance
2.24 Given the existence of universal access to public secondary health
care, (albeit with a €60 per day charge), the 50% of the population
holding PHI appears high by international standards. The general
literature on PHI and the specific research on Ireland broadly explains
the high penetration of PHI as follows; 7
• Ireland has a long-standing practice of private provision of
secondary health care and PHI has been available since 1957.
• Elective admission to public hospitals has been subject to varying
waiting periods, some of which have been quite lengthy in the
past. 8
• The majority of Irish consumers appear to be satisfied with the
value for money of their private health insurance. 9 However, the
rate of increase in premiums continues to significantly exceed
consumer price inflation.
2.25 The high 50% penetration rate has also been positively influenced by
the rapid rate of economic growth since the mid 1990s.
2.26 The proportion of the population with private health insurance has
continued to rise in the current decade and has now reached 50.9% of
the total population 10 . (This percentage includes the restricted
schemes. It is 48.6% excluding those schemes.) With the labour force
and population growing rapidly, the number of health insurance
6 Payments were suspended (but are accruing) due to a court challenge by BUPA Ireland against the
State to the legal validity of the risk equalisation scheme.
7 These conclusions are taken from a synthesis of Nolan and Wiley (2000), the OECD Ireland case
study (2004) and the two consumer surveys commissioned by the HIA (2003 & 2005).
8 In the last two years, waiting lists have been reduced significantly by the operation of the National
Treatment Purchase Fund (NTPF).
9 The HIA’s market review of September 05 indicated that 88% of consumers are satisfied or very
satisfied with the value for money of their private health insurance while 6% claimed to be
dissatisfied.
10 September 2006 data.
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