The cost of Universal Health Insurance

First announced in 2011, promises of a universal single tiered health service in Ireland is as far away now as it was then.

First promised by the Government in 2011, the concept of a ‘universal single-tiered health service’ is a radical idea that would revolutionise the Irish health system. At present Ireland remains the only European country without universal primary care and one of the very few OECD countries without universal healthcare.

In 2014 a Government White Paper on the preferred Universal Health Insurance (UHI) model proposed that everyone would be insured for the same package of health services. People would purchase insurance for this standard package from one of a number of competing health insurers, including for-profit health insurers as well as state-owned, not-for-profit voluntary health insurance healthcare.

However, the system has effectively been kicked into the long grass by former Minister for Health, Leo Varadkar who stated that the decision on which funding model to adopt would not be made anytime soon. It is no coincidence his announcement followed a report by the Economic and Social Research Institute into the cost of the proposed model. The report found that the mean per capita cost of Universal Health Insurance (UHI) is likely to range from €1,600 to €2,509 per citizen.

The White Paper proposes that people on lower incomes would not have to pay the full premium meaning that the cost will be higher than estimated for those who will have to pay for the service. In its review, the ESRI finds that health systems financed through social health insurance are more costly than systems financed through taxation. It states that the White Paper’s proposed model of UHI raises the level of healthcare expenditure largely because of its dependence on private insurance companies that require market margins.

The report does however suggest that a UHI model could reduce the overall cost for meeting unmet need, if it could be designed to reduce the insurance and transaction costs that arise in the current proposals. To develop this cost effective model of UHI, the ESRI recommends the undertaking of further detailed research to identify the extent of unmet need by sector and the capacity required to address it.

The Government’s original proposal for UHI was based on the idea that competing private insurers would increase health system efficiency. This increased efficiency would, it was hoped, result in a reduction in health care costs. However the ESRI report has shown this assumption to be incorrect, forcing the Government to rule out pressing ahead with its plans.

The news that plans to introduce this form of UHI have been shelved was greeted with enthusiasm by the Irish Medical Organisation (IMO) who had criticised the plans from the outset. Speaking about the need for universal healthcare, the president of the (IMO) Dr Ray Walley said that the first priority must always remain the patient.

“UHI was about a new financial management model, a clear distinction must be made between UHI and universal healthcare,” said Walley. “The key beneficiaries of the proposed UHI model are the private insurers and there are no improved outcomes for patients. Government should focus on a plan to provide a properly funded Universal Healthcare model either through taxation or social insurance and there are many examples where this has been achieved successfully.”