The Government is expected to benefit from a financial windfall of more than €50 million arising from a health insurance scheme that was in place up to the end of 2012 to underpin the market.

Minister for Health James Reilly has directed officials to seek a meeting with the Department of Finance in the coming days as part of a process aimed at determining how the surplus will be spent.

Already there are different views on the distribution of the surplus funds available following the closure of the interim age-related tax credit scheme. It was in operation from 2009 until the introduction of a permanent risk-equalisation scheme in the health insurance market last year.

One highly placed source said this weekend that the surplus would be €55.3 million. Another said it would be closer to €60 million.

One school of thought is the money should be given back to insurers who were in the market over the three-year period to 2012. This could see between half and two-thirds going to the State-owned VHI.



Boost to reserves

One argument is these proceeds could be used to boost the VHI’s reserves to facilitate authorisation by the Central Bank, as long demanded by the European Commission.

Another school of thought is the money could be invested into the new risk-equalisation scheme in place since last year, a move that could offset further increases in the levies on health insurers, which some blame for price hikes.

There is also a possibility the Government could decide to use the surplus to deal with any HSE deficit this year.

The age-related tax credit scheme was introduced in 2009 after the Supreme Court struck down as unconstitutional a previous risk-equalisation arrangement. Under it, an age-related tax credit provided to private health insurers in respect of each person over the age of 50 they insured was funded by a stamp duty levied on the companies.

The Department of Health said the issue of any surplushas been raised with the Department of Finance.

“The Minister for Health is conscious that monies collected are in respect of insured members. As directed by the Minister, his officials are keeping the matter under review and have requested a meeting with Department of Finance officials when the scheme is ended and the figures are available later this month .”



Universal health insurance

Meanwhile, Dr Reilly is facing criticism from within the Government over his plans for the implementing of universal health insurance (UHI) – the key reform in the Government’s overall healthcare policy – to be introduced by 2019.

Senior Labour sources said they were “not very impressed at all” by a long-awaited white paper from the Minister. Sources added they felt it was not detailed enough, with question marks over how it could be afforded.

However, senior health sources rejected the criticism as “nonsense”. Sources said it showed a lack of understanding to suggest there should be detailed costings ahead of a consultation process to choose the contents of the standard basket of services under UHI. Health sources said there was “ no Government department that can at this stage declare its budget for 2019”.

The white paper proposes a three-stage process for determining “the health basket” or what would be covered by a standard package under universal health insurance.