Stephen Donnelly

The Health Insurance (Amendment) Bill 2021 will reduce levies on advanced health insurance contracts to €406, a decrease of €43 compared to 2021, and on non-advanced contracts to €122, a decrease of €35.

The bill is expected to be enacted by the Oireachtas by the end of the year and the reductions will come into effect from 1 April 2022.

Health minister Stephen Donnelly said: “It is hoped that this reduction can benefit customers by way of a reduced premium charged by insurers next year. This reduction ensures that all persons, young and old, sick and healthy, can avail of affordable health insurance.”

Stamp duties collected on health insurance contracts are collected into the risk equalisation fund (REF) and redistributed in the form of credits to compensate for the additional cost of insuring older and less healthy people.

Mr Donnelly said a surplus has built up in the REF “as a result of lower claims activity due to Covid-19 and restricted utilisation of hospital services”, allowing for the reduction in stamp duty next year.

The bill also provides for an additional type of credit which will subsidise high claims costs which health insurers incur through providing cover for customers with complex healthcare needs.