1. Private Medical Insurance UK vs Republic of Ireland
Sue Cross AXA PPP healthcare UK
Aongus Loughlin Mercer HR Consulting Ireland
George Orros Universal Health Consultants Moderator UK vs Ireland

2. Irish Healthcare System
System provides free access to all citizens based on ability to pay according to income.
Category I (Means tested & income limit ranges from €6,396-€11,648. All persons over 70 eligible irrespective of income. Approx. 34% of population)
Category II (remainder of population).
Funded from general taxation

3. Ireland – Key features of PMI
Voluntary “private” insurance
Policyholder retains right to use public system
No reduction in tax/social insurance contributions
State provides tax relief on full 20% currently
Market heavily regulated
Community Rating
Open enrolment
Lifetime Cover
Minimum benefits
Risk Equalisation

4. Ireland - Community Rating vs Risk Rating
Source: Dept of Health & Children

5. Ireland -Typical PMI Cover
In-Patient/Day care treatment
Full cover (Max 180 days per year) No exclusion of chronic conditions
Out-Patient specialist consultations/investigations
Limited cover (subject to per item limits & large aggregate annual excess)
Primary Care
Drugs (Out-Patient)
No cover
Cost of most popular PMI coverage in Ireland Adult = €583 Child = €212

6. Ireland - Regulatory framework
Voluntary Health insurance Act, 1957
Health Insurance Act, 1994 (Community rating, Open enrolment & Lifetime cover)
Health Insurance (Amendment) Act, 2001
Health Insurance Authority established February 2001 to determine whether risk equalisation is necessary and oversee PMI system in Ireland
Risk Equalisation Scheme introduced 1st July 2003
Introduction of “lifetime” or “age adjusted” community rating – insurers can charge additional premium loadings to those joining at age 35 or over

7. Ireland - Critical issues
Potential introduction of risk equalisation – currently being considered. Two opposing sides and opinions!
Intent to move towards charging “full economic cost” for private beds in public hospitals
Government intent to reduce waiting lists and National Treatment Purchase Fund.
Market demand for primary care/out-patient cover
Growing demand for Healthcare Cash Plans

8. UK - Public health system
National health service (NHS) is funded from general taxation
Provides in patient, out patient and primary care free of charge
Co-payment on primary care prescriptions

9. UK - Key features of PMI Indemnity based product
Private medical treatment for acute conditions
Predominantly excludes pre-existing conditions
Voluntary private insurance - retain right to full use of public system
No tax incentive for Individuals to purchase PMI

10. UK - PMI
Typical cover Treatments Cover Exclusions In patient/ day case Full refund Chronic (includes drugs) conditions and A&E Out patient Cover varies Annual benefit limit Primary care Not covered Outpatient drugs Not covered
Product variants: Annual excess, NCD, waiting list plans
Average annual premium per subscriber( Laing & Buisson 2002) Total: £773 Individual: £1,161 Company paid: £586

11. UK - Government impact on PMI
Free market - little regulation currently
No personal income tax relief
Insurance premium tax (IPT) - 5% of premium
Company paid premiums are taxed as a benefit in kind
Companies can offset the cost of PMI for tax purposes but cost is subject to employer N.I. charge

12. UK - Critical issues Grow the individual market
Medical expense inflation
Take advantage of public policy decisions
Affordability
Product innovation

13. UK vs Ireland Numbers insured

14. Ireland PMI Number insured vs population
Source: White Paper Private Health Insurance 1999, HIA Annual Report 2002 & independently sourced information from CSO, VHI, BUPA and a number of Restricted Undertakings.

15. UK - PMI Subscribers Corporate vs Individual

16. OECD Health Data – UK vs Ireland

17. Why purchase PMI Choice (specialist/hospital) Comfort ( private room)
Convenience (time of treatment)
Access ( speed of treatment) In-patient waiting lists: UK : 1,000,000 approx (2% of population) Ireland : 18,500 approx (0.45% of population)

18. Key Similarities Aims of PMI
Secondary care provided by public health system
High medical expense inflation
Public policy decisions

19. Key differences Significant political support in Ireland
Regulation Product pricing and design restricted in Ireland ( community rating, open enrolment, lifetime cover, minimum benefits) Risk equalisation in Ireland
Tax incentives
Primary care provision
Market growth
Affordability
Product exclusions

20. What can be learnt?
For UK
(political context is key)
For Ireland