Submission to Health Insurance Authority on Risk Equalisation

The Health Insurance Authority’s recent consultation paper on “Risk Equalisation in the Irish Private Health Insurance Market” invites input on the risk factors to be taken into account in a risk equalisation scheme, such as age, gender and health status.  In the Society’s response to the paper, we emphasise that decisions on risk factors should have regard to, and be consistent with, the objectives of the scheme.  The Society is in favour of a risk equalisation system that encourages competition and new insurers.  It would not be necessary to allow for health status in such a system.  On the other hand, if an objective of risk equalisation is also to address differences in claims costs between insurers arising from the historical structure of the market, taking health insurance into account would make sense in that context.  However, the rationale for doing so should be explicit and transparent.  Thus, the process of establishing a robust risk equalisation scheme must start with a clear statement of the objectives of the scheme, and subsequent decisions on risk factors to be taken into account should be demonstrably linked to those objectives.

Further explanation of the Society’s views on risk factors, benefits to be included in a risk equalisation scheme and transition arrangements as a new scheme is established are set out in our submission.

HIA Consultation Paper